Best ETFs to Invest In, According to AI Analyst, 4/16/2026

Macro uncertainties and geopolitical tensions continue to weigh on investor sentiment. Given a volatile backdrop, exchange-traded funds (ETFs) could be a good investment choice, thanks to their lower risk due to diversification across multiple stocks. To ease selection, TipRanks’ ETF AI Analyst highlights attractive ETFs that can generate solid returns.

Here, we will look at three Outperform-rated ETFs with the potential to generate strong returns: First Trust SMID Cap Rising Dividend Achievers ETF (SDVY), iShares Core Dividend Growth ETF (DGRO), and Fidelity Covington Trust MSCI Consumer Staples Index ETF (FSTA).

Using TipRanks’ Stock Comparison Tool, let’s look at a few metrics of these ETFs.

1. First Trust SMID Cap Rising Dividend Achievers ETF (SDVY) — The SDVY ETF tracks the Nasdaq US Small Mid Cap Rising Dividend Achievers Index and provides exposure to small and mid-cap companies that have a history of raising their dividends. The ETF AI Analyst has a price target of $45 on the SDVY ETF, indicating about 8.5% upside potential. Additionally, the SDVY ETF offers a dividend yield of 1.06%. The Outperform rating on SDVY is backed by strong holdings such as Comfort Systems USA (FIX), EnerSys (ENS), and Woodward (WWD).
2. iShares Core Dividend Growth ETF (DGRO) — The DGRO ETF tracks the Morningstar US Dividend Growth Index and offers low-cost exposure to U.S. stocks focused on dividend growth. It is suitable for investors seeking a blend of income and growth. The ETF AI Analyst has a price target of $78 on the DGRO ETF, implying 7.5% upside potential. Plus, DGRO offers a dividend yield of 2.03%. The AI Analyst’s bullish stance on DGRO is based on holdings in prominent companies such as Apple (AAPL), Microsoft (MSFT), Johnson & Johnson (JNJ), and Merck (MRK).
3. Fidelity Covington Trust MSCI Consumer Staples Index ETF (FSTA) — The FSTA ETF tracks the MSCI USA IMI Consumer Staples Index and provides exposure to a diverse array of companies that provide essential products such as food, beverages, household goods, and personal care items. The ETF AI Analyst has a price target of $58 on the FSTA ETF, implying about 11.6% upside potential. Additionally, the FSTA ETF offers a dividend yield of 2.24%. The Outperform rating on FSTA is based on consumer staple giants Walmart (WMT), Costco (COST), Coca-Cola (KO), and PepsiCo (PEP).