Top 5 ETFs Americans Buy the Most ― Lessons from U.S. Investment Habits

The Top 5 ETFs Most Purchased by Americans ― Messages Hidden in Their Investment Habits

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The Top 5 ETFs Most Purchased by Americans ― What Do They Buy, and Why?

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Introduction ― Why ETFs Became America’s “National Investment Tool”

In the U.S. stock market, Exchange-Traded Funds (ETFs) are no longer just financial products. They are often referred to as “a national tool for personal finance.”

By the end of 2024, more than 3,300 ETFs were listed in the United States, with total assets under management exceeding $7 trillion (about 9,500 trillion won). This amounts to roughly 25% of the entire U.S. GDP, a massive figure that reflects their dominance.

The appeal of ETFs is clear: they provide better risk diversification than individual stocks, come with low fees, high transparency, and the ability to trade instantly on exchanges.

In particular, Americans use ETFs as the basic building block for retirement accounts like 401(k)s and personal investment portfolios.

So, what ETFs are Americans actually buying the most?

The following five have become the core holdings of nearly every American portfolio.

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Part I. America’s Top 5 ETFs

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1. SPDR S&P 500 ETF (SPY) ― The First, and Still the King

Launch: 1993 (the world’s first ETF)

Issuer: State Street

Assets: Over $500 billion (one of the largest in the world)

Index Tracked: S&P 500

SPY is the original ETF and still the most heavily traded one today.

Its daily trading volume often exceeds $30 billion, making it more liquid than many blue-chip stocks.

📌 Strengths

Exceptional liquidity: Easy to buy and sell anytime, perfect for traders.

High visibility: Recognized and used worldwide.

Over 30 years of proven history.

📌 Weaknesses

Expense ratio of 0.09%, higher than competitors like VOO and IVV.

Dividend reinvestment is less tax-efficient compared to rivals.

📌 Case Study

During the 2008 financial crisis, SPY fell more than 50% from its peak. Yet in the following decade, it rose over 300%. This reinforced the belief among investors that “if you stick with SPY, America’s growth will pay off.”

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2. Vanguard S&P 500 ETF (VOO) ― The Darling of Long-Term Investors

Launch: 2010

Issuer: Vanguard

Assets: Around $1 trillion

Index Tracked: S&P 500

Expense Ratio: 0.03% (ultra-low)

VOO tracks the same index as SPY but wins investors over with its rock-bottom fees.

Over decades, even a 0.06% difference in annual expenses compounds into large amounts.

📌 Strengths

Ultra-low cost (0.03%): unmatched for long-term efficiency.

Heavily used in retirement accounts (401k, IRA).

Backed by Vanguard’s strong investment philosophy.

📌 Weaknesses

Lower trading volume than SPY, less ideal for short-term traders.

Less brand recognition compared to SPY.

📌 Case Study

VOO is so popular in retirement planning that many financial planners call it the “default retirement asset.” For long-term savers, VOO has practically become synonymous with the 401k.

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3. Invesco QQQ ETF (QQQ) ― The Icon of Growth

Launch: 1999

Issuer: Invesco

Assets: About $250 billion

Index Tracked: Nasdaq-100 (tech-focused)

QQQ is the go-to ETF for growth, particularly among Millennials and Gen Z investors.

Its portfolio includes giants like Apple, Microsoft, Nvidia, Amazon, and Tesla.

📌 Strengths

Heavy exposure to high-growth sectors like tech, AI, semiconductors, and EVs.

Outperformed the S&P 500 by more than 2x over the past decade.

Perfect for investors betting on innovation.

📌 Weaknesses

Highly volatile, vulnerable during recessions and rate hikes.

Low dividend yields — growth outweighs stability.

📌 Case Study

From 2010 to 2020, QQQ soared nearly sixfold, far outpacing the S&P 500.

In the 2023–2024 AI boom, Nvidia and Microsoft’s surge made QQQ the top beneficiary, and it was consistently the #1 most-purchased ETF among Robinhood users.

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4. Vanguard Total Stock Market ETF (VTI) ― Own All of America

Launch: 2001

Issuer: Vanguard

Assets: About $1.5 trillion

Index Tracked: Entire U.S. stock market (~4,000 companies)

VTI lets investors buy not just large-cap giants but also mid- and small-cap stocks, effectively owning the entire U.S. economy.

📌 Strengths

Broader diversification across all market caps.

Captures the average return of the entire economy.

Very low expense ratio (0.03%).

📌 Weaknesses

May underperform S&P 500 ETFs in the short term.

Less concentrated in big tech compared to QQQ.

📌 Case Study

VTI is a favorite among the FIRE (Financial Independence, Retire Early) community. Many believe that simply accumulating VTI over decades is enough to ensure financial independence and retirement security.

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5. iShares Core S&P 500 ETF (IVV) ― The Quiet Giant for Institutions

Launch: 2000

Issuer: BlackRock

Assets: Around $400 billion

Index Tracked: S&P 500

Expense Ratio: 0.03%

IVV mirrors SPY and VOO but stands out with tax-efficient dividend reinvestment and strong institutional adoption.

📌 Strengths

Ultra-low cost, like VOO.

Tax-efficient structure.

Managed by BlackRock, the world’s largest asset manager.

📌 Weaknesses

Less brand recognition among retail investors.

Lower trading volume compared to SPY.

📌 Case Study

According to a 2024 U.S. pension fund report, IVV had higher allocation rates than SPY in institutional portfolios, showing its strong appeal for retirement and long-term investment strategies.

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Part II. Lessons from ETFs ― America’s Investment Philosophy

ETFs reveal more than financial trends; they encapsulate the U.S. investment mindset. By examining what Americans buy, we see how they prepare for the future.

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1. “Buy the Whole Market”

Top ETFs like SPY, VOO, and IVV track the S&P 500, while QQQ tracks the Nasdaq 100. Rather than betting on individual winners, Americans prefer to buy the entire market.

📌 Why?

Individual companies rise and fall, but the U.S. economy has consistently grown over the last century.

The S&P 500 reflects America’s largest and most representative corporations.

📌 Case Study

During the dot-com crash, the Nasdaq plunged 70%, but long-term S&P 500 ETF investors still doubled or tripled their wealth over two decades.

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2. Low Fees = High Returns

ETF pioneer John Bogle of Vanguard famously said: “The surest alpha in investing is cutting fees.”

This principle drives the popularity of VOO and IVV.

SPY expense ratio: 0.09%

VOO/IVV: 0.03%

The difference compounds massively.

📊 Example Calculation

Invest $10,000 for 30 years at 8% annual returns:

SPY → ~$100,600

VOO/IVV → ~$102,800

That’s a $2,200 difference from fees alone — and the gap scales with larger investments.

Thus, Americans believe “low cost = high profit” in the long run.

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3. Faith in Innovation

QQQ’s success underscores America’s belief in technological progress. Investing in Nasdaq-100 means betting on companies that have reshaped industries and daily life — Apple, Microsoft, Amazon, Google, Nvidia, Tesla.

📌 Case Study

From 2010 to 2020, QQQ returned 6x, doubling the S&P 500’s gains.

In 2023–2024, the AI boom fueled Nvidia and Microsoft, and QQQ surged again.

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4. Retirement and Standardization

ETFs are now the default retirement tool in the U.S.

401(k) and IRA accounts are filled with VOO and VTI, thanks to their broad exposure and low costs.

📌 Case Study

Most American workers automatically invest part of each paycheck into 401(k)s. The majority of that capital flows into ETFs like VOO and VTI.

This makes ETFs not just an investment option, but the standardized path to retirement security.

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Part III. Key Takeaways for Investors

The habits of American investors offer lessons for everyone.

1. ETFs let you buy the whole market. Diversification reduces risk and enhances long-term stability.

2. Fees are never trivial. A small difference compounds into massive outcomes.

3. U.S. habits shape global standards. Since the U.S. stock market dominates global finance, American ETF choices become benchmarks worldwide.

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Conclusion ― ETFs as a Philosophy, Not Just a Product

The Top 5 ETFs most purchased by Americans are SPY, VOO, QQQ, VTI, and IVV.

These are not just popular because of performance. They embody an investment philosophy: belief in broad market growth, the power of low costs, trust in innovation, and the standardization of retirement planning.

👉 Investing in ETFs is essentially “buying the future of the U.S. and global economy.”

👉 For Korean and global investors alike, these five ETFs provide an excellent foundation for portfolio design and financial education.

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📌 References

Bank for International Settlements (BIS), 2024 Report

Bloomberg ETF Flow Report (2024)

Vanguard, BlackRock, State Street Asset Management Data

Financial Times, CNBC, Korea Economic Daily (2023–2025 coverage)