Top 10 ETF Picks for December 2025: Best Investments for Growth Amid AI Expansion, Defense Realignment, and Fed Policy Shifts

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Introduction

As 2025 concludes, ETFs remain a cornerstone for diversified growth investing, navigating an AI-fueled rally, escalating defense needs from global realignments, and a Fed tilting toward measured easing amid persistent inflation. This updated guide refreshes November's top picks with December data, incorporating recent market surges in semiconductors and crypto, while addressing tariff escalations and volatility. Emphasis on blending high-growth themes like AI and defense with hedges like gold and Bitcoin ensures resilience. Diversification across sectors is key to capturing upside while buffering downturns.

Top 10 ETFs

Selections highlight YTD performance, AUM for dependability, and anticipated growth in AI, tech, healthcare, and broad markets. Data sourced from TradingView, Yahoo Finance, and recent analyses.

Top 10 ETF Picks for October 2025

Ranking Methodology 

  • YTD Performance: Based on reported or estimated returns for 2025. Higher returns rank higher, with adjustments for crash resilience (e.g., hedges like gold outperforming during volatility) and sector specific risks.
  • AUM (asset under management): Prioritized large-scale for stability. 
  • Annual performance since listed: Prioritized long term stable performance vs short term volatile performance.
  • Data Sources: Where exact figures are unavailable, we’ve inferred performance based on sector trends (e.g., gold miners, semiconductors, defense) and historical context from the provided references.
Market Context: Key Drivers in Late 2025
  • S&P 500 YTD: ~18% (tech-led rebound post-Q3 dip).
  • AI & Tech Surge: Inflows exceed $150B, with semiconductors up 48% YTD.
  • Defense Boom: European and U.S. budgets swell 15-20% on geopolitical shifts.
  • Crypto Rebound: Bitcoin +120% YTD after spot ETF approvals.
  • Fed Easing: Three rate cuts boost risk assets, but tariff talks add caution.
    Global ETF AUM hits $12T, with thematic funds leading inflows.

Top 10 ETF Picks – December 2025 Rankings

1. iShares Gold Trust (IAU)

  • YTD Performance: ~+59% (TradingView)
  • AUM: ~$62 B (estimated, based on historical size and gold’s safe-haven appeal) 
  • Annual performance since listed: 8%/yr since 2005 (TotalRealReturns)
  • Expense Ratio: 0.25%
  • Rationale: Lower returns than gold miners but offers stability as a physical gold ETF. Significant AUM reflects its popularity as a hedge. 
  • Notes: 
    • The compound annual growth rate (CAGR) of gold in USD over the past 10 years is approximately 12.16%.
    • According to an analysis by Visual Capitalist, gold delivered a 10.9% average annual return over the 25-year period from 2000 through July 2025.
  • Final recommendation: Consider a Hold or Small Dip-Buy, Not a Full Aggressive Entry
    • Confidence Level: Medium
    • Expected time frame: Buy and hold for 6 months (serving as a safe-haven hedge amid ongoing market volatility)

2. Select STOXX Europe Aerospace & Defense ETF (EUAD)

  • YTD Return: ~+69%. (TradingView)
  • EUAD is an exchange-traded fund (ETF) that provides targeted exposure to European companies involved in the aerospace and defense sectors. Launched on October 18, 2024, by Tuttle Capital Management, it tracks the STOXX Europe Total Market Aerospace & Defense Index, which includes firms engaged in manufacturing, servicing, supplying, and distributing civil and military aerospace equipment, systems, technology, and defense services. The fund is non-diversified, focusing on a narrow set of industrials stocks (100% sector allocation), primarily headquartered in Europe. It holds about 15 securities, weighted by market cap, and is designed for investors seeking growth from rising European defense spending amid geopolitical tensions, NATO commitments, and rearmament efforts.
  • AUM: ~$1.2B (significant inflows reported in 2025) 
  • Annual performance since listed: 68%/yr since 2024 (TotalRealReturns)
  • Expense Ratio: 0.50%
  • EUAD is poised for continued outperformance in Q4 2025, as Europe's defense sector enters a "super cycle" fueled by NATO pledges, EU rearmament initiatives, and rising global tensions. Pairing it with U.S.-focused defense ETFs like SHLD could provide balanced exposure. However, risks include geopolitical de-escalation, supply chain issues, or market volatility. It's suitable for growth-oriented portfolios but carries concentration risk due to its narrow focus.
  • Rationale: Exceptional YTD performance driven by rising European defense budgets and geopolitical tensions. Smaller AUM reflects its niche focus.
  • Recommendation: Hold (Medium confidence, hold for 6 months)
  • Note: EUAD carries sector-specific risks (e.g., geopolitical).

3. Global X Defense Tech ETF (SHLD)
  • YTD Return: ~+69% (TradingView)
  • Sector: Defense/Technology (Growth)
  • AUM: $5.2B
  • Annual performance since listed: 57%/yr since 2023 (TotalRealReturns)
  • Expense Ratio: 0.50%  
  • Reason: Invests in defense technology companies benefiting from rising global defense spending, AI integrations in military applications, and geopolitical tensions. Top holdings include Palantir, Rheinmetall, and RTX.
  • Valuation: Slightly overvalued (Expense ratio 0.50%; trading at 0.5% premium to NAV)
  • Recommendation: Hold (medium confidence, 12 months)
  • Note: SHLD carries sector-specific risks (e.g., geopolitical).

4. ARK Autonomous Technology & Robotics ETF: ARKQ

  • YTD Return: ~+41% (TradingView)
  • Focus: AI & Robotics AUM ($B): 1.7 Expense Ratio: 0.75% Top Holdings: Tesla (12.6%), Kratos (10.2%), AeroVironment (5%), Teradyne (7.9%), Palantir (6.3%) Why It's a Top Pick: Active management targets disruptive innovation; high growth potential.
  • Valuation Assessment: Fairly valued (premium 0.03%).
  • Annual performance since listed: 15%/yr since 2014 (TotalRealReturns)
  • Recommendation: Buy (Medium confidence, 12-24 months)


5. Roundhill Generative AI & Technology ETF: CHAT

  • YTD Return: ~+49% (TradingView)
  • Key Strengths: Top growth in generative AI (e.g., chatbots, content creation); concentrated on pure AI plays but newer fund (inception 2023) with strong momentum.
  • Annual performance since listed: 43%/yr since 2023 (TotalRealReturns)
  • Top Holdings: GOOGL (7.65%), NVDA (6.47%), AVGO (4.34%), SK Hynix Inc. (4.05%), Microsoft (3.83%)
  • Beta: N/A
  • Volatility (Std Dev): 7.65%
  • Holdings: 42
  • Expense Ratio: 0.75%
  • AUM ($B): 1
  • Valuation Assessment: Fairly valued (premium 0.15%).
  • Recommendation: Buy (Medium confidence, 12 months)

6. iShares Semiconductor ETF (SOXX)

  • Sector: Semiconductors (Growth)
  • Performance: YTD +43% (TradingView)
  • AUM: $17B
  • Reason: Concentrated in chipmakers; benefiting from AI infrastructure demand.
  • Valuation: Overvalued (Expense ratio 0.35%; 0.5% premium to NAV)
  • Recommendation: Buy
  • Confidence Level: High
  • Timeframe: 12-24 months

7. iShares Silver Trust (SLV)

  • Type: Physically backed (largest holder of physical silver).
  • Expense Ratio: 0.50%.
  • AUM: Over $34 billion.
  • 2025 YTD Performance: ~113-132% (tracks silver spot closely).
  • Why Top: Highest liquidity, most popular for direct silver exposure. Ideal for long-term holders seeking simplicity and low tracking error.

8. iShares Bitcoin Trust (IBIT)

  • YTD Performance: ~-3% (TradingView)
  • AUM: $83.78 B
  • Spot Bitcoin ETF from BlackRock, largest in its category with 0.25% expense ratio. Large AUM and institutional backing position it as dominant in spot Bitcoin ETF market, with bitcoin surging as a debasement hedge amid the crash.
  • Annual performance since listed: 55%/yr since 2024 (TotalRealReturns)
  • Expense Ratio: 0.25%
  • Note: When considering annualized returns, Bitcoin's rate of return stands at 230%, which is 10 times higher than the second-best performing asset class, the Nasdaq 100 Index. (coinglass.com)
  • Final recommendation: Hold
    • Confidence Level: Medium
    • Expected time frame: Hold for 1 year


9. Invesco QQQ Trust (QQQ)

  • Sector: Technology/Growth
  • Performance: YTD +22%
  • AUM: $415B
  • Reason: Tracks Nasdaq-100 with heavy AI/tech emphasis; outperforming amid innovation surge.
  • Valuation: Slightly overvalued (Expense ratio 0.20%; trading at 0.3% premium to NAV)
  • Recommendation: Buy
  • Confidence Level: High
  • Timeframe: 12 months

10. Vanguard Growth ETF (VUG)

  • Sector: Growth Stocks
  • Performance: YTD +21%
  • AUM: $200B
  • Reason: Targets large-cap growth firms; robust AI and tech holdings propelling gains.
  • Valuation: Fair valued (Expense ratio 0.04%; at NAV)
  • Recommendation: Buy
  • Confidence Level: Medium
  • Timeframe: 12-24 months


Read More: Top XRP ETFs to Watch in 2025: Dominating Holdings, Low Fees, and Performance Insights 
Recommended Portfolio Allocation Ideas (Example for Balanced Growth Investor, $100K Portfolio)
  • 25% Defense/Aerospace → EUAD + SHLD (12.5% each)
  • 20% AI/Tech Core → QQQ or VUG
  • 15% Semiconductors → SOXX
  • 15% Thematic Innovation → ARKQ + CHAT (7.5% each)
  • 15% Hedges → IAU + IBIT (7.5% each)
  • 10% Crypto Miners → WGMI
Rebalance quarterly; cap any single ETF at 15% to manage concentration.Key Risks to Monitor
  • Geopolitical Volatility: Escalating tariffs or de-escalation could swing defense ETFs 20%+ quarterly.
  • Sector Concentration: Heavy Nvidia/Palantir exposure in AI/defense funds amplifies single-stock risks.
  • Valuation Bubbles: AI P/E ratios >35; potential Fed pause if inflation rebounds.
  • Crypto Swings: Bitcoin miners like WGMI face 50% drawdowns on halvings or regulation.
  • Market Crash Echoes: 2025's mid-year dip highlights need for 5+ year horizons.
Mitigate with 20-30% bonds/cash and stop-losses on high-beta positions.2026 OutlookExpect 15-22% sector returns, led by AI inference (SOXX/CHAT +25%) and defense realignment (EUAD/SHLD +20%). Crypto could double if adoption accelerates, but tariffs may cap broad growth at 10-15%. Watch Fed minutes and election outcomes for pivots. Long-term compounding favors diversified ETF sleeves.
Conclusion:
December 2025's top ETFs blend AI dynamism with defensive resilience, updated for end-of-year momentum. Prioritize alignment with risk tolerance for sustained gains. Editor's Note: Focus on volatility-proof strategies over hype.

For real-time quotes or to verify AUM and performance, check platforms like Yahoo Finance, Trading View, Morningstar, or etf.com using the ETF tickers.


Editor's Note

Our approach never chases short-term hype. Instead, our analysts, supported by AI, carefully select recommendations designed to build portfolios that compound over the long term. Investors must be prepared to hold through market volatility to realize sustained growth and achieve their financial goals.


Disclaimer

This is not financial advice. Past performance doesn’t guarantee future results. Consult a financial advisor and conduct your own research before investing, particularly in light of the ongoing 2025 market crash.

The information presented in this article is intended for general informational purposes only and should not be construed as professional financial or investment advice. The revenue figures, company rankings, and projections are based on publicly available data, company reports, and industry estimates as of 2025. All currency conversions, where applicable, are based on annual average exchange rates.

While efforts have been made to ensure the accuracy and timeliness of the information, One Day Advisor and the article’s authors do not guarantee the completeness, reliability, or suitability of the content for any particular purpose. Readers are encouraged to verify details independently and consult qualified professionals before making any business, investment, or healthcare decisions based on the information provided.

The article may reference ongoing developments, regulatory actions, or market events that are subject to change. One Day Advisor is not responsible for any losses or damages arising from the use of this information.


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