Unleashing the Power of Stock ETFs: A 2025 Retrospective
The world of stock exchange-traded funds (ETFs) is a dynamic and ever-evolving landscape, offering investors a unique blend of accessibility, diversity, and potential for growth. In this article, we'll dive into the top-performing stock ETFs of 2025, exploring the strategies and factors that contributed to their success. But here's where it gets controversial: some of these funds might not be as reliable as they seem, and we'll uncover why.
ETFs, often hailed as low-cost and tax-efficient tools, provide investors with a way to track popular indexes or leverage expert manager choices. They are traded throughout the day on an exchange, unlike their open-end mutual fund counterparts. In 2025, the spotlight shone on mid-cap growth funds, with ARK Autonomous Technology & Robotics ETF (ARKQ) and ARK Space & Defense Innovation ETF (ARKX) taking center stage.
Screening for Excellence: Uncovering the Top Performers
When evaluating ETFs, long-term returns over multiple years and market cycles are the true test. However, short-term returns offer valuable insights into the biases and strategies within these funds. To identify the best-performing stock ETFs of 2025, we screened those in the Morningstar US equity category, trading within the United States, and excluded exchange-traded notes and ETFs with assets under $100 million.
Our list revealed two large growth funds, with an average rise of 16.07% in 2025. Here's a glimpse at the top 10:
- ARK Autonomous Technology & Robotics ETF (ARKQ)
- ARK Space & Defense Innovation ETF (ARKX)
- ARK Next Generation Internet ETF (ARKW)
- Alger 35 ETF (ATFV)
- ARK Innovation ETF (ARKK)
- Alger Concentrated Equity 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)
Metrics for Success: A Deep Dive into the Top Performers
ARK Autonomous Technology & Robotics ETF (ARKQ):
This $1.8 billion ETF topped the charts in 2025 with a 48.7% return. Actively managed, it outperformed the average mid-cap growth fund, rising 40.92% over three years and placing it in the 1st percentile for the period. Launched in September 2014, it carries a Neutral rating.
ARK Space & Defense Innovation ETF (ARKX):
With a Morningstar Rating of ★★★★★ and an expense ratio of 0.75%, this $534.9 million ETF came in second, gaining 48.28% in 2025. Actively managed, it beat the average mid-cap growth fund. However, it carries a Negative Morningstar Medalist Rating, suggesting it might struggle to deliver positive returns after fees.
ARK Next Generation Internet ETF (ARKW):
Valued at $2.1 billion, this ETF ranked third, returning 38.69% in 2025. Actively managed, it outperformed the average mid-cap growth fund. Launched in September 2014, it holds a Neutral rating.
Alger 35 ETF (ATFV):
This $115.1 million ETF ranked fourth, returning 37.49% in 2025. Actively managed, it beat the average large growth fund. Launched in May 2021, it carries a Neutral rating.
ARK Innovation ETF (ARKK):
With assets of $7.1 billion, this ETF ranked fifth, gaining 35.58% in 2025. Actively managed, it outperformed the average mid-cap growth fund. Launched in October 2014, it holds a Negative rating.
Alger Concentrated Equity ETF (CNEQ):
Valued at $224.1 million, this ETF ranked sixth, returning 33.45% in 2025. Actively managed, it beat the average large growth fund. Launched in April 2024, it has no three-year record and carries a Neutral Morningstar Medalist Rating.
Strategas Macro Thematic Opportunities ETF (SAMT):
This $377 million ETF ranked seventh, gaining 33.10% in 2025. Actively managed, it outperformed the average large blend fund. Launched in January 2022, it holds a Neutral rating.
Invesco S&P 500 High Beta ETF (SPHB):
Valued at $620.4 million, this ETF ranked eighth, returning 32.81% in 2025. Passively managed, it beat the average mid-cap blend fund. Launched in May 2011, it carries a Silver rating.
TCW Transform Systems ETF (PWRD):
With assets of $980.5 million, this ETF ranked ninth, gaining 32.58% in 2025. Actively managed, it outperformed the average large blend fund. Launched in February 2022, it holds a Neutral rating.
iShares Large Cap Core Active ETF (BLCR):
Valued at $109.5 million, this ETF ranked tenth, returning 30.85% in 2025. Actively managed by BlackRock, it beat the average large blend fund. Launched in October 2023, it has no three-year record and carries a Silver Morningstar Medalist Rating.
Unraveling the ETF Mystery: What You Need to Know
ETFs are investments that trade on stock exchanges, much like individual stocks. Historically, they tracked indexes, but now many are actively managed. They cover various asset classes, from stocks and bonds to commodities and even cryptocurrency. ETFs offer investors efficient market exposure, often with low fees and easy buying and selling. They also tend to be more tax-efficient than open-end funds.
Finding the Right ETFs for Long-Term Success
While ETFs are often associated with low-cost indexing, the market has become increasingly complex. Some ETFs focus on narrow market segments or specific themes, while others invest based on factors or combinations thereof. Now, actively managed ETFs are also in the mix. To navigate this landscape, consider these Morningstar resources:
- Morningstar's Guide to ETF Investing: Learn about ETF types, costs, and investment strategies.
- The Best ETFs and How They Fit in Your Portfolio: Discover the highest-rated ETFs across categories.
- Christine Benz's ETF Portfolios: Explore suggested ETF portfolios for retirement savers, including tax-efficient options.
- Morningstar Investor Screener: Research ETFs based on your criteria, including asset class, Morningstar Category, Medalist Rating, and fee level.
- Morningstar's ETF Page: Stay updated with the latest articles and videos from our ETF specialists.
This article was generated with automation assistance and reviewed by Morningstar editors. Learn more about our automation use and editorial policies.
So, what do you think? Are these top-performing ETFs a reliable long-term investment, or are there hidden risks? Share your thoughts in the comments below!
