Exchange-traded funds (ETFs) had a strong performance in 2024 as inflows surged by over $1 trillion. Most of these inflows were in active and crypto-focused funds like Bitcoin’s IBIT and FBTC. So, this article looks at some of the best ETFs for value investors to buy and hold in 2025.
VanEck Wide Moat ETF (MOAT)
Warren Buffett has always recommended investing in quality companies that have a wide moat in their operations. These firms have strong pricing power and are extremely difficult to disrupt. For example, it is highly difficult to disrupt companies like Moody’s, Visa, Mastercard, and Google.
The MOAT ETF offers investors a chance to invest in quality companies that have a wide moat in the industries. It does that by tracking the Morningstar Wide Moat Focus Index, which has 55 companies that have a wide moat.
Most of MOAT’s companies are industrials, health care, information technology, and consumer staples. Salesforce is the fund’s biggest company and customer relations software provider. It also owns companies like Mulesoft and Slack that dominate their industries.
Gilead is another company in the MOAT ETF. It is a healthcare company that has a leading market share in the HIV treatment industry.
Autodesk, the largest provider of CAD software, is another major player in the MOAT ETF. Other big names include Emerson Electric, Walt Disney, Transunion, Altria Group, and Kenvue.
MOAT has a long history of doing well. Its total return in the last five years stood at 80.9%, while its performance this year was 11.7%.
SPDR S&P Dividend ETF (SDY)
The SPDR S&P Dividend ETF is another good value ETF to invest in in 2025. It is a popular fund with over $20 billion in assets. It tracks the S&P High Yield Dividend Aristocrats Index. It specifically follows companies that have constantly grown their dividends for at least 20 years, with the hope that the momentum will continue.
The biggest companies in the fund are in the industrials, consumer staples, utilities, materials, and health care. Chevron, the biggest company in the fund, has grown its dividend for over 37 years and is showing no signs of slowing down. It has a dividend yield of about 4.65% and a payout ratio of 56%.
Realty Income, another top company in the SDY ETF, is another popular company among dividend investors. It has paid and raised its dividends for over 26 years and is set to benefit substantially as interest rates start falling. Data shows that it has a dividend yield of about 6.12%.
The other top names in the SDY ETF are Exxon Mobil, Archer Daniels Midland, Edison International, and Kimberly Clark.
Pacer US Cash Cows 100 ETF (COWZ)
The COWZ ETF is another ideal value ETF to invest in in 2025. This fund focuses on the concept of free cash flow, which analysts believe is the most important one in corporates. Free cash flow refers to all the funds that remain after a company has paid for everything. In most cases, companies use these funds to pay dividends and fund their share repurchases.
The COWZ ETF is made up of 100 companies that have a good record of having strong free cash flows. Most of these firms are in the information technology industry, followed by consumer discretionary, energy, industrials, and health care.
Some of the biggest companies in the fund are Gilead Sciences, Archer-Daniel-Midland, Bristol-Myers Squibb, Nike, Qualcomm, and AT&T.
The COWZ ETF has a long track record of rewarding its shareholders. Its total returns in the last five years was 101%, beating many value ETFs. It also beats the S&P 500 index.
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