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  • The Motley Fool

    Want to Get Richer? 2 Top ETFs to Buy Right Now

    By Joe Tenebruso,

    4 hours ago

    Exchange-traded funds ( ETFs ) offer investors a simple way to profit from powerful economic trends. There are two economic trends dominating headlines lately and there are two ETFs that are particularly well-situated to tap into these trends and deliver wealth-growing returns to their investors. Let's take a closer look at each.

    1. This small-cap ETF could supersize your gains

    With inflation abating, the Federal Reserve is sending out strong signals that it is on the verge of reducing interest rates for the first time since the onset of the COVID-19 pandemic in early 2020. A rate cut, which would lead to reduced borrowing costs for businesses and consumers alike, could come as soon as September. Such a move would provide a powerful stimulus to the economy and a likely corresponding jolt to the stock market.

    Smaller companies, which rely heavily on loans to fuel their growth, tend to benefit greatly from lower interest rates. Owners of small-cap stocks , in turn, could enjoy enormous gains. If you'd like to position yourself to profit from a small-business boom, consider investing in the SPDR Portfolio S&P 600 Small Cap ETF (NYSEMKT: SPSM) today.

    The SPDR Portfolio S&P 600 Small Cap ETF offers you an easy way to quickly obtain ownership stakes in several hundred businesses. The fund has positions in more than 600 stocks with a weighted average market value of $3.3 billion. Most of the stocks it holds lie squarely in small- and micro-cap territory. It also holds some big winners that have successfully grown into mid-cap status.

    Value-focused investors will also appreciate that the stocks held by the SPDR Portfolio S&P 600 Small Cap ETF are currently trading at an attractive price. With an average price price-to-earnings ratio ( P/E ) of less than 16, this small-cap ETF is trading at a sizable discount to many broad-market index funds, such as those that track the S&P 500 .

    Better still, the SPDR Portfolio S&P 600 Small Cap ETF is an ultra-low-cost fund. Its annual expense ratio of only 0.03% amounts to just $0.30 per $1,000 invested annually. Thus, nearly all the ETF's gains will flow to you rather than the fund's managers.

    2. Here's how you can profit from the AI boom

    Demand is soaring for artificial intelligence ( AI ) and the game-changing innovations it enables. AI could boost the global economy by a staggering $15.7 trillion by 2030, according to consulting firm PwC. If you'd like to claim your share of the AI gold rush, consider building a position in the WisdomTree Artificial Intelligence and Innovation Fund (NYSEMKT: WTAI) .

    The ETF holds shares of 75 companies with some of the best AI technology on the planet. Areas of focus include semiconductors, machine learning software, and high-performance computing infrastructure. Key end markets include drones, robotics, and autonomous vehicles.

    Here are the fund's top five holdings and the percentages of its portfolio they comprise:

    1. Nvidia , 3.2%
    2. Meta Platforms , 2.6%
    3. Arm Holdings , 2.5%
    4. Broadcom , 2.5%
    5. Apple , 2.4%

    All five are outstanding businesses. Combined with other large holdings like Taiwan Semiconductor Manufacturing , Alphabet , and Microsoft , these proven winners can provide ballast to your portfolio. At the same time, smaller, rapidly expanding companies like drone maker AeroVironment and automation specialist Symbotic offer even more AI-fueled growth potential.

    Lastly, the WisdomTree Artificial Intelligence and Innovation Fund has a modest expense ratio of 0.45%, which equates to about $4.50 per $1,000 invested annually. This well-constructed ETF thus offers you an easy and relatively low-cost way to profit from the AI boom.

    Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AeroVironment, Alphabet, Apple, Meta Platforms, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy .

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