Exchange-traded funds (ETFs) offer the means to quickly and easily gain access to the most promising areas of the stock market. Well-chosen sector ETFs can provide investors with better diversification than individual stocks, but with a greater focus on lucrative investment themes than more broad-based funds.
Read on to learn about two ETFs with particularly attractive profit potential.
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Less red tape, more green arrows
The Trump administration has made deregulation a priority. President Donald Trump believes fewer unnecessary regulations will result in lower costs for businesses and consumers and higher economic growth. If he's right, the financial industry could be about to receive a powerful boost.
Investing in the Vanguard Financials ETF (NYSEMKT: VFH) is a great way to potentially profit from a rally in financial stocks. The fund holds shares in over 400 businesses in the financial sector. This includes banks, asset managers, mortgage providers, payment processors, exchanges, and insurance companies. As of Jan. 31, key holdings included JPMorgan Chase, Berkshire Hathaway, Mastercard, and Goldman Sachs.
Regulatory decisions can sometimes create operational burdens that affect the financial sector. If the Trump administration enacts changes that end up reducing compliance costs for banks and other financial services providers, profit margins should rise. Deregulation might also usher in a wave of dealmaking, which could bring more efficiencies to the industry and further support the prices of financial stocks.
Better still, Vanguard recently reduced the fees it charges to oversee many of its funds. The Vanguard Financials ETF now has a modest expense ratio of 0.09%. That will cost you only about $0.90 annually for every $1,000 you choose to invest in this ETF.
Your key to cashing in on the AI boom
If you're looking for another sector set to soar, consider the tech industry. Artificial intelligence (AI) is poised to drive productivity gains throughout the global economy. The companies that enable this game-changing tech are likely to see their sales and profits surge.
For its part, Precedence Research sees the global AI market growing from $638 billion in 2024 to $3.7 trillion by 2034. The Roundhill Generative AI & Technology ETF (NYSEMKT: CHAT) could provide you with a convenient way to claim your share of the coming AI gold rush.
Roundhill's ETF has shares in 50 AI stocks. Chipmakers like Nvidia and Taiwan Semiconductor Manufacturing, cloud computing providers like Microsoft and Alphabet, and AI software stars like Palantir Technologies and Meta Platforms are among the fund's largest holdings. So, if you're searching for an easy way to invest in the most powerful and innovative AI companies, Roundhill's fund is a solid choice.
The ETF's expense ratio is higher than more diversified funds at 0.75%. That amounts to roughly $7.50 annually for every $1,000 you choose to invest. But that's still a relatively meager amount to quickly gain exposure to many of the leading AI companies in the world.
Moreover, pairing the Roundhill Generative AI & Technology ETF with the Vanguard Financials ETF would give you the means to profit from two sectors with promising long-term prospects. That's a smart strategy, as taking multiple shots on goal gives you more ways to win.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $304,161!*
- Apple: if you invested $1,000 when we doubled down in 2008, you’d have $44,694!*
- Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $534,395!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of March 3, 2025
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. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. JPMorgan Chase is an advertising partner of Motley Fool Money. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Berkshire Hathaway, Goldman Sachs Group, JPMorgan Chase, Mastercard, Meta Platforms, Microsoft, Nvidia, Palantir Technologies, and Taiwan Semiconductor Manufacturing. The Motley Fool 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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