Exchange-Traded Funds (ETFs) have become a favorite investment vehicle for building long-term wealth. Combining the diversification of mutual funds with the liquidity of stocks, ETFs offer an accessible and cost-effective way to participate in the growth of various markets.
As we move into 2025, it’s crucial to choose ETFs that align with your long-term goals, risk appetite, and market trends. In this ETF masterclass, I, Sanjay Kathuria, present the 5 best ETFs for long-term wealth creation in 2025—backed by strong fundamentals and growth potential.
Why Choose ETFs for Long-Term Wealth?
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Diversification: Exposure to multiple stocks/bonds reduces risk.
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Low Costs: ETFs typically have lower expense ratios than mutual funds.
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Transparency: Holdings are disclosed daily.
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Liquidity: ETFs trade like stocks on exchanges, allowing easy buying/selling.
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Flexibility: Choose sector, thematic, index-based, or bond ETFs.
5 Best ETFs to Consider in 2025
1. Nifty 50 ETF
A classic choice for Indian investors, the Nifty 50 ETF tracks the top 50 companies listed on the NSE. It offers broad market exposure and is ideal for beginners and seasoned investors alike.
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Why? It captures the growth of India’s blue-chip companies.
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Long-term potential: High, given India’s economic growth trajectory.
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Cost: Very low expense ratio (~0.05%-0.1%).
2. S&P 500 ETF (e.g., Vanguard VOO or BlackRock IVV)
To diversify internationally, an S&P 500 ETF provides exposure to 500 of the largest U.S. companies across sectors.
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Why? The U.S. remains a global economic powerhouse.
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Long-term potential: Proven track record of wealth creation.
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Cost: Ultra-low expense ratios (around 0.03%).
3. Technology Sector ETF
Tech continues to drive innovation and growth. ETFs focused on technology companies (like NASDAQ 100 ETFs) can capture trends in AI, cloud computing, and semiconductors.
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Why? High growth potential with increasing tech adoption worldwide.
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Risks: Volatility can be higher, so consider your risk tolerance.
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Examples: Invesco QQQ ETF.
4. Gold ETF
Gold remains a reliable hedge against inflation and market downturns. Including a Gold ETF can balance your portfolio and reduce volatility.
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Why? Diversification and safe-haven asset.
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Long-term potential: Preservation of wealth.
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Popular choices: Nippon India Gold ETF, SBI Gold ETF.
5. International Emerging Markets ETF
Emerging markets like China, Brazil, and Southeast Asia offer growth potential as their economies develop and consume more.
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Why? Diversify beyond India and the U.S.
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Risks: Political and currency risks exist.
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Examples: iShares MSCI Emerging Markets ETF.
Tips for Investing in ETFs for the Long-Term
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Start Early: Compounding works best over time.
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Stay Consistent: Regular investments via SIP can reduce market timing risks.
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Diversify: Don’t put all eggs in one ETF basket.
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Review Periodically: Rebalance based on changing goals or market conditions.
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Understand Tax Implications: Long-term capital gains rules apply differently to ETFs.
Final Thoughts by Sanjay Kathuria
ETFs provide a powerful yet simple way to build wealth steadily over years. The 5 ETFs listed here offer a balanced mix of growth, diversification, and safety suited for 2025 and beyond.
Remember, the best ETF portfolio is one tailored to your personal financial goals and risk profile. If you want help designing a winning ETF strategy or need advice on selecting ETFs that fit your profile, I’m here to help.
