Demand for exchange-traded funds (ETFs) continues to rocket. Strong inflows over January and February mean “the European ETF market has had the strongest start to a year in its almost three-decade history“, according to Morningstar.
It’s easy to see why. These products allow investors to diversify their portfolios cheaply and easily. And they are extremely flexible — for instance, stock ETFs can track certain sectors, indexes or themes. They can also deliver enormous returns, though these can be below those delivered by individual share picking.
Looking for top funds to buy this April? Here are three to consider.
Going for gold
Those who invest ‘against the herd’ should look at the iShares Physical Gold ETC. It’s fallen sharply, as a resurgent US dollar and changing interest rate expectations have smacked bullion prices.
Can the gold price bounce back though? I think it can, driving metal-backed funds like this higher again. Gold is a natural safe haven during periods of economic strife and geopolitical turbulence. And while the dollar’s performing strongly now, I think it’s just a matter of time before it recedes once more. Worries over US sovereign debt and the political landscape Stateside aren’t going away any time soon.
iShares Physical Gold has delivered an average annual return of 24.4% over five years.
Case for the defence
The defence sector hasn’t avoided the recent market volatility, either. But funds like the WisdomTree Europe Defence ETF (LSE:WDEF) do have considerable growth potential that’s been boosted by the Middle East conflict.
Sure, European nations are largely resisting US calls for involvement in and around Iran. However, President Trump’s verbal attacks on NATO have intensified because of this, and with it doubts over US support for the defence bloc. Could this provide further reason for European NATO nations to boost spending? It’s possible. Defence budgets among these countries jumped 20% in 2025.
The WisdomTree Europe Defence ETF has risen 23.2% in value since its launch in March 2025. Performance could cool if the geopolitical landscape calms. But with concerns over Russian and Chinese foreign policy growing, and a war now intensifying in the Middle East, I’m confident the fund will keep soaring.
Tech titan
Cybersecurity threats are growing sharply in both number and sophistication. This reflects in part the rising role of hacking in state-sponsored warfare and the advance of new technologies. Google warned last week that quantum computers could disrupt most encrypted computer systems by 2029, for example.
In this landscape, having robust protection systems is becoming increasingly important. This is where the L&G Cyber Security ETF comes in. It holds 28 of the world’s best cybersecurity companies, and has delivered an average yearly return of 13.7% over 10 years.
Looking ahead, the fund could underperform if some of its largest holdings experience high-level system failures. However, the fund’s large number of holdings helps to effectively spread this risk.
