Exploring IRA Options and Top ETFs
IRA accounts can be a solid choice for those saving for retirement, especially for people lacking access to employer-sponsored plans like 401(k)s or 403(b)s. They’re also good for those seeking a broader range of investment choices than usually available in a 401(k).
Both Roth and traditional IRAs offer significant tax benefits compared to standard brokerage accounts. With a Roth IRA, you invest after-tax money, allowing your earnings to grow tax-free. Essentially, if you make withdrawals after the age of 59.5, you won’t owe any taxes on those earnings. On the other hand, a traditional IRA allows pre-tax contributions, deferring taxes until you withdraw, which might be advantageous if you find yourself in a lower tax bracket later.
If you’re thinking of starting an IRA, consider these three compelling ETF options that can set you on the right path.
Three Recommended ETFs for IRAs in 2026
- Vanguard Total World Stock ETF VT
- iShares Core Universal USD Bond ETF IUSB
- Fidelity High Dividend ETF FDVV
First up is the Vanguard Total World Stock ETF, VT, which is Gold-rated. The main aim of tax-advantaged retirement accounts—regardless of the specific type—is long-term savings. And what better way to maximize your potential than by investing in the stock market? VT offers exposure to the entire global stock market within a single portfolio, all for just 6 basis points. It’s known for its diversification and low costs while applying solid indexing strategies.
VT tracks the FTSE Global All-Cap Index, representing about 98% of global stocks by adjusting for free float market capitalization. This adjustment is especially vital for diverse portfolios, given that many emerging markets have low float and liquidity.
This highly diversified ETF gives investors access to top-performing stocks while cushioning against the risks associated with any single investment going south. Its global perspective also helps mitigate the typical home bias most investors have, who often overweight their domestic markets.
These factors have played a role in its impressive performance, with the ETF outdoing its peers in the Global Large-Cap Blend Morningstar Category by 1.9 percentage points annually over the decade ending December 2025.
Next is the iShares Core Universal USD Bond ETF, IUSB, which is rated Bronze. Although typically, retirement portfolios should lean more toward stocks, bonds are still crucial. For instance, younger investors saving for retirement and a first home can utilize IRA provisions to withdraw funds for a down payment without incurring penalties. Other exceptions also allow for early withdrawals for qualified education, birth, or adoption expenses.
High-yield fixed-income ETFs like IUSB help dampen portfolio volatility while still generating substantial income. The ETF follows the Bloomberg U.S. Universal Index, capturing both investment-grade and high-yield segments of the U.S. taxable bond market. Its portfolio, while focused on safe government and high-quality corporate bonds, also benefits from a somewhat reduced allocation to lower-quality bonds, enhancing yield—recording 4.2% in December 2025 compared to 3.9% for the Bloomberg U.S. Aggregate Bond Index.
Lastly, we have the Silver-rated Fidelity High Dividend ETF, FDVV. This fund strikes a balance between return potential and quality. Dividend payers are assessed on yield, payout ratio, and growth, ensuring that the focus remains on sustainable companies rather than unstable options.
FDVV selects the highest-scoring stocks across various sectors while also adjusting their weights based on market capitalization. This strategy helps keep the fund aligned with the broader market while still pursuing aggressive sector weightings to enhance yield where possible.
The end result is a portfolio that offers strong dividends and mitigates risks associated with low-quality stocks. FDVV’s robust approach has earned it higher yields and superior risk-adjusted returns relative to the Russell 1000 Value Index. From its inception in 2016 until 2025, it consistently outperformed both the high-value Morningstar Category Average and the Category Index by over 2 percentage points annually.
