17 Best ETFs for Beginners Looking to Start Investing in 2026

3. Expense Ratios and Why Low Costs Matter

The expense ratio represents one of the most critical factors in ETF selection, as these annual fees directly impact your investment returns over time, and even seemingly small differences can compound into substantial amounts over decades of investing. Expense ratios are expressed as a percentage of your investment and are automatically deducted from the fund's assets, meaning lower ratios leave more money working for you in the market. For example, an ETF with a 0.03% expense ratio costs just $3 annually for every $10,000 invested, while a fund with a 0.75% expense ratio would cost $75 for the same investment amount. Over a 30-year investment horizon, assuming a 7% annual return, the difference between these expense ratios could result in tens of thousands of dollars in additional wealth for the investor choosing the lower-cost option. The competitive landscape among ETF providers has driven expense ratios to historically low levels, with many broad market index funds now charging less than 0.10% annually, making professional portfolio management accessible to investors of all sizes. Beginning investors should prioritize ETFs with expense ratios below 0.20% for broad market exposure, as higher fees are generally only justified when accessing specialized strategies or markets that require more complex management. Understanding the long-term impact of fees helps new investors appreciate why cost-conscious investing is essential for building wealth, and why the ETF structure's inherent efficiency advantages make these funds particularly attractive for long-term portfolio construction.