Learn more about ETF investment strategies in 2025. Whether you’re new to ETFs or looking to refine your portfolio, discover the benefits, techniques, and tips for successful ETF investing across various sectors.
An exchange-traded fund, also known as an ETF, is a type of investment fund that you can trade on a stock exchange. ETFs offer an easy way to invest in a diversified portfolio of assets, such as stocks, bonds, or commodities. ETFs have recently gained popularity among investors for their benefits including diversified, cost-effective, liquid, and flexible investment options.
If you’re interested in learning more, check out our article about What are ETFs?
Learn more about ETF strategies to better align your financial goals, risk tolerance, and investment preferences.
1. Dollar cost averaging
Dollar-cost averaging is a popular investment strategy that involves investing a fixed amount of money at regular intervals, regardless of market conditions. For example, you might invest €500 in an ETF every month. This strategy aims to reduce the impact of market volatility on investment returns by spreading out purchases over time.
Many online investment platforms offer automated dollar-cost averaging options where you can set up recurring purchases of ETF shares. This automation simplifies the investment process and ensures consistent contributions over time. Dollar-cost averaging is particularly effective for long-term investors who are focused on accumulating wealth for the long-term. By consistently investing, you benefit from compounding returns and the potential for growth in your investment portfolio.
If you’re interested in learning more, check out our article on the 7 best investment ideas for 2025.
2. Swing trading
Swing trading is a short to medium-term trading strategy that involves taking advantage of price swings in the market. Unlike day trading, which involves buying and selling securities within the same trading day, swing trading typically involves holding positions for several days to weeks, capturing price movements during upswings and downswings.
Swing traders aim to capitalize on short-term price movements, buying when they anticipate an upward swing in prices and selling when they expect a downward swing. This timing strategy can potentially lead to quick profits if executed correctly.
There are a few advantages of swing trading, such as market timing opportunities, flexibility, reduced time commitment, and profit potential within trending markets. However, like any trading strategy, it requires skill, discipline, risk management, and continuous learning to be successful.
3. Short selling
Short selling is a trading strategy where an investor sells borrowed shares of a security with the expectation that the price will decline in the future. The investor aims to buy back the shares at a lower price to return them to the lender, profiting from the price difference. Short selling is essentially betting against the price of a stock or other asset.
The primary advantage of short selling is the ability to profit from falling prices. Investors can capitalize on stocks they believe are overvalued or likely to decline in price. Short selling is commonly used by active traders and speculators to capitalize on short-term price movements, market inefficiencies, or news-driven events, offering opportunities for quick profits in volatile markets. This strategy requires careful analysis, risk management, and market expertise. It’s typically done by experienced investors, traders, and institutions who understand the complexities and potential pitfalls of shorting securities.
4. Environmental, social, and governance (ESG) investing
ESG-focused ETFs invest in companies that meet environmental, social, and governance criteria. Investors interested in sustainability and ethical investing use these ETFs to align their investments with their values.
As investors recognize the importance of sustainability in driving long-term value and positive societal impact, ESG investing is gaining traction. It represents a holistic approach to investing that considers financial returns alongside environmental, social, and governance considerations.
ESG investing evaluates aspects of a company, like its carbon footprint, greenhouse gas emissions, and efforts to mitigate climate change. ESG investors also assess how companies manage natural resources such as water, energy, and land. Efforts to conserve resources, promote recycling, and minimize waste are valued.
5. Sector rotation
Sector rotation is an investment strategy that involves shifting investments among different sectors of the economy based on the prevailing economic and market conditions. The goal of sector rotation is to capitalize on sector-specific trends, opportunities, and relative strength while managing risk and optimizing portfolio performance.
Sector rotation is often linked to the economic cycle. Different sectors of the economy perform differently at various stages of the economic cycle, influencing sector rotation strategies. Each sector of the economy, such as technology, healthcare, consumer staples, financials, energy, and industrials, has its own characteristics, drivers, and performance dynamics.
While sector rotation can enhance portfolio diversification and potential returns, it requires careful analysis, monitoring, and disciplined execution to navigate market cycles and sector dynamics effectively.
How to build an ETF portfolio
Now that we’ve covered ETF strategies, it’s time to build an ETF portfolio. There are a few different options for building a portfolio. You can create your own portfolio based on your risk profile, or you can choose a portfolio that is curated for you. Mintos offers a curated ETF portfolio of stocks and bonds that’s dynamically rebalanced to align with your financial goals and is tax-optimized for European investors. There are no fees for buying, holding, or selling ETFs on Mintos.
If you choose to create your own portfolio, you’ll need to make sure you’re monitoring and rebalancing your portfolio to track how it’s performing relative to both benchmarks and your investment objectives. If you choose to invest in ETFs on Mintos, monitoring is as easy as logging into your account, and the rebalancing is done for you.
Get started quickly with a personalized ETF portfolio.
