3 of the Best ETFs to Buy Before 2027

The market has spent much of 2026 fixated on artificial intelligence (AI) spending and the effects of high inflation. This month, investors also realized that Congress’s composition is about to change dramatically, creating a potentially very different political environment.

As we head into 2027, there may be better opportunities ahead in the infrastructure and defensive corners of the market.

Here are three ETFs that I believe deserve a closer look in the coming year.

1. Global X U.S. Infrastructure Development ETF

One of the biggest themes of 2026 has been infrastructure spending. Most of that has been related to the AI build-out, but it really goes beyond just that.

AI data centers are likely to get all the attention. There will probably be some pushback in the new Congress about trying to manage their construction. But I think there’s little question that the need for AI processing power will remain strong as long as development continues. That includes the demand for electrical equipment, construction, and industrial infrastructure.

The Global X U.S. Infrastructure Development ETF (PAVE +0.81%) benefits from the capital spending needed to build out this infrastructure. Several of the mega-cap tech companies have reiterated their big spending plans for the coming year, so I’d expect the demand for this to be more durable than people think. Of course, if those capex plans start to get dialed back, there’s the risk for a correction.

2. Vanguard Health Care ETF

Healthcare isn’t an exciting sector, and it was a steady laggard throughout the initial AI boom. The last year, however, has been a different story. The Vanguard Health Care ETF (VHT +0.01%) has gained 27% versus just an 8% gain for the S&P 500.

Part of that is due to the reversal of the big tech rally we’ve seen lately, as well as a broadening of equity demand that has favored more defensive and value-oriented themes. But the fundamental backdrop is also looking more encouraging.

Revenue and earnings growth for the sector has been modest so far for Q3, but Q4 is looking more optimistic. Year-over-year earnings growth for Q4 is currently forecasted to come in around 13%, which would be the 2nd best non-energy, non-tech sector performance for the quarter. State Street also entered the fourth quarter with a positive view of the sector, pointing to better fundamentals in biopharma, life-sciences tools, and managed care.

There’s a chance that Democratic control of Congress could bring more attention to drug pricing and health insurance practices, but any major changes or healthcare legislation seems unlikely to happen in the near future.

3. iShares U.S. Aerospace & Defense ETF

Investing in this space is clearly a play on the Iran war continuing. Geopolitical tensions are making governments further prioritize spending on defense capabilities, cybersecurity, military readiness, and equipment modernization. Given the current depletion of military weapons supplies, this sector will likely see much more spending.

The iShares U.S. Aerospace & Defense ETF (ITA +1.28%) is one of the biggest funds targeting this space. It’s a bit of a top-heavy way to invest in this sector-GE Aerospace and RTX are the top two holdings with a combined allocation of 38%-but it’s one that unquestionably has one of the sturdiest demand profiles in the entire economy.

The obvious downside risk to this sector as an investment is an end to the Middle East conflict. There’s been little indication that a resolution to the war is coming, but the midterm election results certainly sent the message that people are ready for it to end. Whether that translates to an actual end of the conflict remains to be seen, but I’m doubtful. Defense spending has been a consistent focus in government budget talks, but I don’t believe we’ll see a demand slowdown here anytime soon.