Types of ETFs and Top ETFs in 2025

Exchange-Traded Funds (ETFs) are baskets of securities—usually stocks, bonds, or other assets—that trade on an exchange just like individual shares. When you buy an ETF, you instantly own a slice of every security inside it, giving you built-in diversification in a single trade.

Unlike buying individual stocks, where your portfolio might rely heavily on just a few companies, ETFs spread your risk across dozens—or even hundreds—of holdings. This makes them one of the simplest and most cost-efficient ways to build a diversified portfolio.

ETFs vs. stock picking

For most investors, picking individual stocks that consistently beat the market is extremely difficult—especially in today’s fast-moving markets.

According to SPIVA’s 2024 scorecard, over 65% of actively managed large-cap U.S equity funds underperformed the S&P 500. ETFs solve this challenge by giving you:

• Market-matching returns: They passively track an index, so you capture the broad market’s performance without relying on fund manager skill.
• Lower costs: ETFs usually have much lower expense ratios compared to actively managed funds.
• Instant diversification: Reduce concentration risk—one ETF can hold 50 to 500+ securities.
• Liquidity and flexibility: Buy or sell anytime during market hours, unlike unit trusts or mutual funds that trade once per day.
• Tax efficiency: Many ETFs are designed to minimize taxable events, helping you keep more of your returns.

Read about the difference between unit trusts, mutual funds, ETFs and money market funds

Why ETFs are crucial in 2025

The economic landscape of 2025 is shaped by cooling inflation, potential Fed rate cuts, and moderate but uneven global growth. This mix makes risk management and smart asset allocation more important than ever. ETFs allow you to:

• Adjust your portfolio quickly as macro conditions change (e.g., add bonds when rates fall, tilt toward growth when markets recover).
• Access niche opportunities like clean energy, AI, and robotics without having to pick individual winners.
• Build resilient, diversified portfolios at low cost—ideal for both beginner investors and experienced traders.

Invest from $1 USD

With StashAway ETF Explorer, you can explore and filter 80+ asset classes chosen for optimal value to create personalised portfolios based on risk tolerance and investment goals.

In less than one minute, you can go from idea to investment for a flat fee of $1 USD per transaction while enjoying some of the lowest FX spread in the market.  

Types of ETFs you can invest in

ETFs aren’t one-size-fits-all. They come in many flavors, each designed to serve a specific role in your portfolio. Some give you broad market exposure for steady growth, others focus on generating income, hedging risks, or even capturing short-term trading opportunities.

Understanding the main ETF categories is key to building a well-balanced portfolio in 2025. Here’s a quick overview of the major types and what they can do for you:

1. Core equity ETFs

Equity ETFs are the growth engine of most portfolios. They provide instant diversification by tracking a broad basket of stocks, making them one of the simplest ways to participate in global equity markets. Investors often combine broad market exposure with more targeted ETFs for specific sectors or regions.

US large-cap core: the S&P 500 titans

These ETFs track the 500 largest US companies and form the backbone of many global portfolios. They offer broad, diversified exposure to the US economy and remain the most liquid ETFs in the world.

* data as of 12th Sep 2025

Compare SPY, VOO, IVV ad CSPX

US tech and growth: the Nasdaq 100

Nasdaq 100 ETFs focus on the 100 largest non-financial companies listed on the Nasdaq exchange. They are heavily tilted towards technology, communications, and consumer discretionary sectors, offering concentrated exposure to growth-oriented businesses.

* data as of 12th Sep 2025

Learn more QQQ and other Nasdaq 100 funds

International diversification: beyond US borders

Global diversification helps reduce home-country risk and gives exposure to economies at different stages of the cycle. Investors often use a mix of developed market and emerging market ETFs to build a more balanced portfolio.

Developed markets

Developed market ETFs invest in large and mid-cap stocks across regions like Europe, Japan, Canada, and Australia, excluding the US. They provide exposure to mature economies with stable corporate governance and liquidity.

* data as of 12th Sep 2025

All-world and emerging markets

All-world ETFs combine developed and emerging markets into one fund, while emerging market ETFs focus specifically on faster-growing economies such as China, India, Brazil, and Taiwan. These funds can add growth potential but also higher volatility.

* data as of 12th Sep 2025

2. Bond ETFs: core income and diversification tools

Bond ETFs provide access to fixed-income markets in a single trade, making them an easy way to add stability, income, and diversification to a portfolio. They hold baskets of government, corporate, and international bonds, and can be used for both core allocations and tactical interest rate positioning.

Aggregate bond ETFs

Aggregate bond ETFs are the fixed-income equivalent of broad-market equity funds. They include US Treasuries, mortgage-backed securities, and investment-grade corporate bonds, giving diversified exposure to the entire US bond market.

* data as of 12th Sep 2025

Long-duration and treasury ETFs

Long-duration bond ETFs provide exposure to longer-maturity US Treasuries, making them highly sensitive to interest rate moves. Investors use them to position for falling rates or as a hedge in risk-off environments.

* data as of 12th Sep 2025

Short-term bond ETFs

Short-term bond ETFs focus on bonds with maturities under three years, offering lower interest rate sensitivity and more stable prices. They are often used for capital preservation and as a cash alternative.

* data as of 12th Sep 2025

International and global bond ETFs

These ETFs invest in non-US bonds and often hedge currency exposure to reduce FX volatility. They can diversify interest rate risk across regions and provide exposure to global fixed-income markets.

* data as of 12th Sep 2025

Specialized bond ETFs

Specialized bond ETFs focus on narrower segments such as mortgage-backed securities or inflation-protected bonds, allowing more precise portfolio positioning.

* data as of 12th Sep 2025

3. Balanced ETFs: the "all-in-one" portfolio

Balanced or "asset allocation" ETFs offer a pre-packaged, diversified mix of stocks and bonds in a single ticker. They are designed to provide investors with a simple, one-stop solution for building a diversified portfolio without having to manually rebalance between asset classes. 

These funds are ideal for investors seeking convenience, automatic rebalancing, and disciplined asset allocation.

Core balanced allocation ETFs

These ETFs follow a traditional risk-based approach, typically with a fixed allocation to equities and bonds (e.g. 60/40). They are designed as straightforward building blocks for hands-off investors.

* data as of 12th Sep 2025

Alternative and enhanced allocation ETFs

Some balanced ETFs go beyond the classic 60/40 split by using options strategies, closed-end funds, or leverage to achieve enhanced outcomes such as higher income or better risk management.

Global balanced allocation ETFs (UCITS)

For international investors, UCITS-domiciled balanced ETFs provide global exposure to equities and bonds with different allocation levels, all within a single fund.

4. Commodity ETFs: hedging against inflation and volatility

Commodity ETFs give you exposure to raw materials such as metals, energy, and agricultural products. They often act as a hedge against inflation and geopolitical risk and can diversify a portfolio beyond traditional asset classes.

Precious metals: gold and silver

Precious metal funds track the prices of gold or silver and serve as classic hedges during economic volatility.

Compare the S&P500 with gold

Energy: oil, natural gas

Energy ETFs track commodities like crude oil or natural gas, typically through futures contracts and provide exposure to energy-price movements.

Agriculture

Agricultural ETFs offer exposure to food-related commodities.

Broad commodity strategy ETFs

These ETFs span multiple commodity sectors—energy, metals, agriculture—in a single fund to reduce concentration risk.

5. Currency ETFs: speculation and hedging tools

Currency ETFs give investors exposure to foreign exchange movements without having to trade the forex market directly. They can be used to hedge currency risk or to speculate on the relative strength of one currency versus another. 

Because they typically rely on derivatives or currency trusts, they are better suited for short-term tactical strategies rather than long-term buy-and-hold investing.

Single-currency trust/exchange ETFs

These ETFs track the performance of a single currency relative to the US dollar, allowing investors to express a directional view on that currency.

USD-strength / Dollar index ETFs

Dollar index ETFs track the value of the US dollar against a basket of major world currencies (euro, yen, pound, Canadian dollar, Swedish krona, Swiss franc). They are commonly used to hedge USD exposure or speculate on dollar strength.

UCITS & currency-hedged share classes of equity/fixed income ETFs

These are share classes or ETFs that hedge currency risk (currency of exposure → home currency) and are domiciled in Europe (Ireland, Luxembourg, etc.). They reduce FX risk for investors whose base currency is not the foreign asset’s currency.

6. Real estate ETFs: a play on falling interest rates

Real estate ETFs give investors diversified access to property markets through listed REITs (real estate investment trusts) and real estate operating companies. These funds are particularly sensitive to interest rate movements because real estate is a capital-intensive business: lower rates reduce borrowing costs, support property valuations, and make REIT dividend yields more attractive relative to bonds.

In a falling-rate environment, real estate often leads other sectors as capital flows back into income-producing assets. Beyond yield, REIT ETFs can also offer inflation protection—rental income and property values typically rise over time—making them a strategic diversifier in multi-asset portfolios. With exposure spanning office, residential, industrial, retail, healthcare, and data centers, REIT ETFs provide a simple, liquid way to own real estate without the hassle of direct property ownership.

U.S. REIT ETFs

These funds mainly cover U.S. real estate markets—commercial, residential, industrial, and specialty sectors like data centers or infrastructure.

Global / UCITS-domiciled real estate ETFs

These options offer exposure beyond just the U.S., including Europe, Asia, or global REIT/REOC mixes, often via UCITS ETFs.

7. Volatility ETFs: high-risk hedging instruments

Volatility ETFs are specialist tools designed for hedging or speculating on market stress. They normally track measures like the VIX (CBOE Volatility Index), not by owning the VIX itself, but by holding futures on the VIX. 

Because of this futures roll structure, plus contango and volatility decay, these funds tend to lose value if held for long periods in calm markets. They are generally suited to short-term tactical use only and are not appropriate for most buy-and-hold investors.

Short-term VIX futures ETFs

These funds hold VIX futures contracts with short maturities (often 1-2 months) to capture spikes in fear. They tend to be volatile and are used for immediate hedging or speculative plays.

Mid-term / roll-adjusted volatility ETFs

These ETFS use mid-term VIX futures or blended maturities, smoothing out some short-term noise but still exposed to roll costs.

Inverse volatility / decay-oriented ETFs

These are designed to profit when volatility falls (i.e. “inverse VIX” exposure). Because of daily resets and compounding effects, these are even more dangerous for anything longer than a very short horizon.

UCITS / international volatility funds

UCITS-domiciled pure VIX futures ETFs are rare due to regulatory complexity and limited demand, especially outside the US. However, there are related offerings such as minimum volatility or low-volatility equity ETFs, which hedge or tilt toward low volatility rather than directly holding volatility futures. E.g.,

8. Leveraged ETFs: high-octane trading tools (expert use only)

Leveraged ETFs aim to deliver multiples (e.g. 2× or 3×) of the daily return of an underlying index. Because they reset daily and use derivatives, volatility decay and compounding effects can make their long-term performance diverge sharply from the benchmark.

These products are designed for short-term speculative or hedging use only, not for passive investors or long-term holds.

High-leverage sector/tactical plays

These ETFs target specific sectors or indices with 2× or 3× daily leverage. They are highly volatile and often used to amplify moves in technology, semiconductors, or growth segments.

Double-leverage & 2× alternatives

These funds offer lower leverage (2×) for those wanting aggressive exposure with slightly lower decay risk compared to 3× funds. These might include SSO (2× S&P 500) and similar funds.

9. Inverse ETFs: betting on the downside (expert use only)

Inverse ETFs are built to go up when the market they track goes down. They target −1×, −2×, or −3× daily returns via derivatives or swaps, and are rebalanced daily. 

Because of volatility decay and path dependency, holding inverse ETFs beyond short periods is very risky. They serve strictly as tactical hedges or speculative bets, not as long-term investment tools.

Major market inverse ETFs

These funds give inverse exposure to broad indices like the S&P 500 or Nasdaq-100, at 1×, 2×, or 3× leverage.

10. Crypto ETFs: regulated exposure to cryptocurrency assets

Crypto ETFs or ETPs (exchange-traded products) give you access to cryptocurrencies without directly owning or managing digital wallets. They are highly volatile, subject to regulatory risk, and should generally be used as satellite holdings—not core portfolio pieces.

They track underlying assets (Bitcoin, Ethereum, Solana etc.) either physically or via derivatives, and costs, security, and custody differ materially.

Bitcoin-only ETFs / ETPs

These are funds or ETPs that track the spot price of Bitcoin—not via futures or derivatives. Both US-listed ETFs and European/UCITS ETPs are increasingly available.

Ethereum-focused ETFs / ETPs

These track Ethereum (ETH) price, sometimes including staking rewards. UCITS/European ETPs are more common in this category; U.S. spot ETH ETFs are still less mature or fewer in number.

Solana-focused ETFs / ETPs

Fewer pure Solana ETPs are as established, with some ETPs listed below:

The spotlight on Singapore: SGX-listed ETFs

For Singapore-based investors, SGX-listed ETFs offer a compelling mix of convenience, cost-efficiency, and tax advantages. Trading in SGD means avoiding FX conversion costs, while the absence of dividend withholding tax makes them attractive for income-focused portfolios. Many SGX ETFs are also CPF and SRS-eligible, making them an excellent building block for retirement portfolios.

Whether you want to capture the performance of the Straits Times Index, invest in Asian REITs, gain exposure to global markets like the S&P 500 or Hang Seng Tech Index, or hedge with bonds and gold, SGX offers a one-stop platform to do it efficiently.

Major SGX-listed ETFs

Where to buy ETFs in Singapore

Once you’ve selected the right ETF for your strategy, the next critical decision is choosing where to buy it. The platform you use has a direct impact on your total cost, user experience, available market access, and tax reporting obligations.

Broadly, there are 3 types of platforms:

1. Traditional brokerages operated by local banks (e.g. DBS, OCBC, UOB)
2. Global and fintech brokers (e.g. Interactive Brokers, Moomoo, Tiger)
3. Robo-advisors offering curated ETF portfolios (e.g. StashAway, Endowus, Syfe)

Each comes with distinct pros and cons depending on your investing style and the markets you want to access.

Platform comparison table

ETF Explorer makes investing simple

ETF Explorer is the simple, cost-effective way to invest in ETFs across assets and themes, carefully chosen by our investment team from thousands of options for cost-efficiency, tax optimisation and strong management.

Filter 80+ asset classes to your preferences and get clear, jargon-free explanations for all our ETFs so you know exactly what each ETF represents — and why it could fit your goals. 

With selected ETFs in hand, you can go from idea to investment in as little as 1 minute. No extensive research, hunting through thousands of tickers, and clunky brokerage screens — just pick, invest, and you’re done!

All this for a flat fee of $1 USD per transaction — keeping more of your returns where they belong: with you. There are no additional management fees and our FX spread is among the lowest in the market, so more of your money goes into growing your wealth.    

Ready to invest in ETFs? Here's how you can it invest in trending asset classes with StashAway's ETF Explorer:

1. Sign up to StashAway seamlessly with SingPass.
2. Create your ETF Explorer portfolio from 80+ asset classes.
3. Invest instantly for just $1 USD!

Your decision framework: how to choose the right ETF in 2025

Selecting the right ETF is not a matter of chasing recent performance. It requires a structured, analytical approach—one that aligns the fund’s attributes with your long-term financial objectives, risk profile, tax situation, and market access. In 2025, the range of available ETFs is broader than ever. The right choice must serve a clear purpose in your portfolio.

Step 1: Define the strategic role — Core vs Satellite

Begin by identifying the purpose of the ETF in your portfolio. Is it part of your core allocation or a tactical satellite?

A well-constructed portfolio typically includes both: core ETFs for long-term growth, and satellites to express market views or thematic convictions.

Step 2: Scrutinise total cost of ownership

Costs are one of the few certainties in investing. While they may appear marginal, over time they compound and materially erode net returns.

Hidden costs like wide bid-ask spreads or high FX markups can exceed the stated TER. Total cost—not just headline fees—should be your benchmark.

Step 3: Optimise for taxes — ETF domicile is critical

For Singapore-based investors, tax leakage from dividends and estate exposure are critical factors that influence long-term returns.

A UCITS ETF tracking the S&P 500 (e.g. CSPX) retains 15% more of your dividend than a US-domiciled equivalent (e.g. SPY). Over 10+ years, this advantage compounds significantly.

Explore the best dividend ETFs.

Step 4: Assess liquidity and scale

Liquidity ensures efficient execution and reduces trading slippage. Scale ensures the ETF is sustainable and cost-effective.

Metrics to evaluate:

• Assets Under Management (AUM): Minimum of US$100 million (UCITS) or US$1 billion (US) is ideal.
• Average Daily Volume: Higher volumes reduce bid-ask spreads.
• Bid-Ask Spread: Target ETFs with spreads under 0.20% for frequent trades.
• Inception Date: Prefer ETFs with at least a 3-year track record.

Illiquid ETFs, especially thematic or synthetic ones, can expose you to large transaction costs or risk of fund closure.