16 Low-Cost ETFs to Buy

Expense ratios for index funds have declined in recent years, making them a cheap investing strategy to consider. Here are 16 low-cost ETFs to consider.

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Low-cost ETFs are a friend to investors of every stripe. Thanks to years of fee wars among competing fund providers, you can diversify your portfolio using hundreds of different investing strategies for mere pennies on the dollar.

"Low cost" (or "cheap") and "quality" are two adjectives that almost always seem to sit at different lunch tables. It makes sense – high quality tends to necessitate high cost. And where it doesn't, you're rightfully skeptical. How does "half-price Lasik" sound? What about "discount brain surgery"? "Bargain-basement electrical services," anyone? You naturally flinch at these terms because "low cost" and "quality" frequently oppose one another.

Cost-conscious retailer Edgar Vautrine doesn't mince words about the choice we're often forced to make:

"You don't want the very best. You want cheap. And I got cheap."

Fortunately for investors, ETFs are a rarity in that you can get something good for a very low (or sometimes no) price.

Index funds have proven plenty competitive with their actively managed counterparts, and they're only getting cheaper by the day. According to the Investment Company Institute, as of last year, the average expense ratio for index equity ETFs declined by one basis point to 0.16%, or a mere $16 annually for every $10,000 invested. (A basis point is one one-hundredth of a percentage point.) Index bond ETFs were even less expensive, also declining by a basis point to 0.11%.

But those are just averages – numerous ETFs cost even less.

Today, we're going to look at 16 low-cost ETFs covering six distinct investing strategies. These funds max out at just more than 8 basis points in annual fees, though many are much cheaper, and a few are even free. (Data is as of July 3.)

Kyle Woodley

Kyle Woodley is the Editor-in-Chief of Young and The Invested, a site dedicated to improving the personal finances and financial literacy of parents and children. He also writes the weekly The Weekend Tea newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.

Kyle was previously the Senior Investing Editor for Kiplinger.com, and the Managing Editor for InvestorPlace.com before that. His work has appeared in several outlets, including Yahoo! Finance, MSN Money, Barchart, The Globe & Mail and the Nasdaq. He also has appeared as a guest on Fox Business Network and Money Radio, among other shows and podcasts, and he has been quoted in several outlets, including MarketWatch, Vice and Univision. He is a proud graduate of The Ohio State University, where he earned a BA in journalism. 

You can check out his thoughts on the markets (and more) at @KyleWoodley.