Exchange-traded funds (ETFs) are generally low-cost and efficient investment vehicles that let investors track various popular indexes. They provide opportunities to leverage skilled management in order to potentially outperform the market. Effectively, they can serve as low-cost parts of a portfolio. A distinct advantage of ETFs over open-end mutual funds is that they are traded throughout the day on exchanges.
In 2025, some of the top-performing equity ETFs included the ARK Autonomous Technology & Robotics ETF (ARKQ) and the ARK Space & Defense Innovation ETF (ARKX). The data from this article comes from Morningstar Direct.
Identifying Top ETFs
When it comes to evaluating ETFs, it’s important for investors to emphasize long-term returns across several years and various market cycles. Still, short-term returns can shed light on any biases in the investment strategy.
To pinpoint the best equity ETFs for 2025, we looked at those in the Morningstar U.S. Equity category trading within the United States. Funds related to exchange-traded bonds and those with assets below $100 million were excluded from our analysis. Among our findings, two funds in the large growth category averaged a return of 16.07% that year.
Top 10 ETFs of 2025
- ARK Autonomous Technology & Robotics ETF (ARKQ)
- ARK Space and Defense Innovation ETF (ARKX)
- ARK Next Generation Internet ETF (ARKW)
- Algiers 35 ETF (ATFV)
- ARK Innovation ETF (ARKK)
- Algiers Concentrated Stock ETF (CNEQ)
- Strategas Macro Thematic Opportunities ETF (SAMT)
- Invesco S&P 500 High Beta ETF (SPHB)
- TCW Transform Systems ETF (PWRD)
- iShares Large Cap Core Active ETF (BLCR)
Evaluating the Best ETFs
ARK Autonomous Technology & Robotics ETF
The ARK Autonomous Technology & Robotics ETF, valued at $1.8 billion, led the pack with a 48.7% return, significantly outperforming the average mid-cap growth fund’s 7.73%. Over the last three years, it gained 40.92%, surpassing the 15.17% average for similar funds, placing it in the top percentile for that timeframe. This ETF was launched in September 2014.
ARK Space and Defense Innovation ETF
- Morningstar Rating: ★★★★★
- Expense Ratio: 0.75%
- Morningstar Category: Mid-Cap Growth
The ARK Space and Defense Innovation ETF, amounting to $534.9 million, appreciated by 48.28%, making it the second-best performer for 2025. It also exceeded the average annual return of 7.73% in its category over the past three years, registering a 32.58% gain. Interestingly, this ETF has a negative Morningstar Medalist Rating and is regarded by some analysts as unlikely to provide positive net returns.
ARK Next Generation Internet ETF
- Morningstar Rating: ★★★
- Expense Ratio: 0.76%
- Morningstar Category: Mid-Cap Growth
This ETF has a market value of $2.1 billion and recorded a 38.69% return in 2025. It has notably gained 57.23% over the past three years, surpassing competing funds in its category and securing a spot in the top percentile. This ETF was also established in September 2014.
Algiers 35 ETF
- Morningstar Rating: ★★★★★
- Expense Ratio: 0.55%
- Morningstar Category: Large Growth
Ranked fourth, the Algiers 35 ETF rose by 37.49% and was notable for outpacing the average gains of large-cap growth funds over the past three years. This ETF, launched in May 2021, has delivered a 38.78% increase in the same period.
ARK Innovation ETF
- Morningstar Rating: ★
- Expense Ratio: 0.75%
- Morningstar Category: Mid-Cap Growth
The ARK Innovation ETF generated a 35.58% return, positioning it as the fifth-best performer in 2025. Notably, it has shown a 35.09% gain over the last three years, again exceeding the average in its category. Launched in October 2014, it has received a negative rating.
Algiers Concentrated Stock ETF
- Morningstar Rating: N/A
- Expense Ratio: 0.55%
- Morningstar Category: Large Growth
This ETF achieved a 33.45% return, ranking sixth in 2025 and surpassing the average gains within its category. Established in April 2024, it currently has no long-term track record.
Strategas Macro Thematic Opportunities ETF
- Morningstar Rating: ★★★
- Expense Ratio: 0.66%
- Morningstar Category: Large Blend
With a return of 33.10%, this ETF stands as the seventh-best performer for the year, meeting much of the average gain in its category over three years. It was launched in January 2022.
Invesco S&P 500 High Beta ETF
- Morningstar Rating: ★★★★★
- Expense Ratio: 0.25%
- Morningstar Category: Midcap Blend
This ETF reached an impressive 32.81% return, ranking eighth. It surpassed the average gain in its category and was launched in May 2011.
TCW Transform Systems ETF
- Morningstar Rating: ★★★★★
- Expense Ratio: 0.75%
- Morningstar Category: Large Blend
The TCW Transform Systems ETF climbed 32.58%, becoming the ninth-best in 2025, and generally exceeded the fund averages in its category. This ETF was established in February 2022.
iShares Large Cap Core Active ETF
- Morningstar Rating: N/A
- Expense Ratio: 0.36%
- Morningstar Category: Large Blend
Finally, the iShares Large Cap Core Active ETF, valued at $109.5 million, saw a return of 30.85%. Launched in October 2023, it has received a silver rating.
Understanding ETFs
Exchange-traded funds are unique investments that trade on stock exchanges throughout the day, similar to stocks. Unlike mutual funds that can only be transacted at a set price once each day, ETFs typically track financial indices. In recent years, there’s been a growing selection of actively managed ETFs. They can represent various asset classes, spanning stocks, bonds, commodities, and even cryptocurrencies.
Investors value ETFs for their efficiency, often enjoying low fees and ease of buying and selling. They are usually more tax-efficient than traditional mutual funds.
Finding Long-Term Top ETFs
While many view ETFs as budget-friendly options, the market has grown more complex. Some track specific niches, while others are based on different investment factors or combinations thereof. Actively managed options have also stepped into the fray.
To locate the best ETFs for the long term, you can utilize various reported resources:
- Check guides to understand the diversity of ETFs, their associated costs, and investment strategies.
- Identify top-rated ETFs within specific investment categories.
- Consider consulting expert analyses on ETF portfolios designed for different saving needs, including retirement.
- Utilize tools to assess ETFs based on your personal criteria, such as asset class and fees.
- Stay informed with articles and videos focusing on ETFs.
