ETF investing ideas for a soft landing in 2025

Our 2025 investment outlook anticipates a soft landing for the economy this year. How might investors position their portfolios for what lies ahead? Our new guide offers actionable ideas for ETF investors.

Our outlook

On the macro level, we anticipate a soft landing for the global economy, with growth slowing in the near term but reaccelerating later in the year. Inflation is getting closer to target in most developing markets, with no significant downturn expected. Central banks are easing monetary policies to stimulate growth, creating a favorable environment for risk assets, especially in non-US developed markets, small-cap stocks, and value sectors in the US. We believe emerging markets should perform well, driven by rate cuts in developed markets and global growth, with China's upside risk tied to policy stimulus confidence. 

Our ETF ideas

Investors can use ETFs to implement their economic outlook. For instance, they might favor equal-weight or small-cap equity ETFs for potential growth, senior loans in fixed income for attractive valuations, and commodities for diversification and inflation hedging.

Here are our top ETF ideas to consider based on our 2025 outlook: 

Equities

We see a risk-on environment globally, with small-caps and value likely to outperform, with both developed and emerging markets benefiting from policy easing. Our top ETF picks for equities lie in small-caps (XSVM, DWAS), large-caps (RSP, RSPA, RWL), international development (EFAA), and emerging markets (CQQQ). 

Fixed income

Current yields look attractive, but spreads are unlikely to further tighten, given current valuations. Our top picks are BKLN, VRP, GTO, and BulletShares ETFs. 

Alternatives

Alts can provide diversification and act as an inflation hedge in a portfolio. Our top ETF and ETP picks within alternatives include PDBC, DBB, BTCO, BLKC, and SATO. 

Thematic secular trends

We believe capitalizing on the long-term trends reshaping society can be beneficial to investors. Our top thematic ETF picks are KBWB, PPA, and IGPT.