3 Important ETFs to Watch in 2025

iShares Core S&P 500 ETF

IVV

+0.59%

Back in November 2024, I wrote an article titled “Why the SPDR S&P 500 ETF Trust (SPY) Remains the King of ETFs,” and honestly, I might need to eat my words soon.

Why? The second-largest S&P 500 ETF, the iShares Core S&P 500 ETF

, is showing breakneck growth. As of January 2025, IVV recorded one-month trailing inflows of $23.51 billion—far outpacing SPY, which took in $13.95 billion over the same period.

As of December 31, IVV’s assets under management (AUM) sit at $585.74 billion, compared to SPY’s $623.80 billion. Assuming this pace continues, IVV could surpass SPY in roughly four to six months.

IVV is significantly cheaper than SPY, with an expense ratio of 0.03% compared to SPY’s 0.095%. However, what’s holding IVV back for now is its lack of daily options, offering only weeklies. If this changes, it could accelerate IVV’s path to becoming the new king of S&P 500 ETFs.

iShares 20+ Year Treasury Bond BuyWrite Strategy ETF

TLTW

+0.1%

I believe 2025 will be another strong year for covered call ETF outperformance, but only for those selling calls on bonds, specifically the iShares 20+ Year Treasury Bond BuyWrite Strategy ETF

.

This ETF implements a buy-write strategy by selling one-month-to-expiry, 2% out-of-the-money calls on the iShares 20+ Year Treasury Bond ETF

.

TLT is highly volatile and extremely sensitive to movements in long-term yields, with an average duration of around 16 years. Because of this volatility, the calls sold on TLT tend to command high premiums, giving TLTW a trailing 12-month yield of 14.47% as of January 3.

I’m predicting TLTW will outperform TLT in 2025. Currently, the 20-year bond yield sits at 4.87%. While it briefly peaked at 6.12% in August 2023, I don’t foresee yields climbing much higher long-term.

However, I also don’t see them dropping significantly anytime soon, as the economy remains strong and inflation somewhat sticky. Thus, if yields stay elevated and TLT remains rangebound with high volatility, a buy-write strategy like TLTW’s could prove to be a winning approach.

WisdomTree International Hedged Quality Dividend Growth Fund

IHDG

+0.91%

The almighty U.S. dollar is currently dominating global currencies, steamrolling the Canadian dollar, euro, yuan, and yen alike. One major consequence? Non-hedged international equity ETFs have struggled—not just this year, but for much of the last decade.

The reason lies in currency mechanics. International ETFs hold underlying stocks traded in foreign currencies, but their shares are traded in USD. When the U.S. dollar strengthens, the value of those foreign holdings decreases when converted back into dollars, dragging down returns.

I don’t expect 2025 to be any different—momentum tends to sustain itself. That’s why, if I were to invest internationally, I’d opt for a fund like the WisdomTree International Hedged Quality Dividend Growth Fund

.

This ETF tracks 300 companies from the WisdomTree International Equity Index, screening for growth based on long-term earnings growth expectations and for quality using metrics like return on equity (ROE) and return on assets (ROA).

Rather than weighting companies by market cap, IHDG uses annual cash dividends paid, and—crucially—it neutralizes currency fluctuations between foreign currencies and the U.S. dollar.

This article is for informational purposes only and does not in any way constitute investment advice. The author may express their own opinions, which may not represent the opinions of ETF Central or its affiliated partners. It is essential that you seek advice from a registered financial professional prior to making any investment decisions.