3 Great ETFs for Rebalancing Your Portfolio in 2026

Zachary Evens: If you’ve checked your portfolio recently and it looks a little lopsided, you’re not alone. US stocks have had a wild ride in 2025 and into 2026. Depending on how you’re invested, your target allocation may have drifted meaningfully from where you want it to be. That means it may be time to rebalance.

Any of these three Gold-rated exchange-traded funds could be just what the doctor ordered to recenter your portfolio.

3 Great ETFs for Rebalancing Your Portfolio in 2025

1. Schwab U.S Dividend Equity ETF SCHD
2. Dimensional International Value ETF DFIV
3. Vanguard Short-Term Treasury Index ETF VGSH

The first ETF on this list is Schwab U.S. Dividend Equity ETF SCHD. It earns a Gold

and charges just 6 basis points per year. This ETF tracks the Dow Jones U.S. Dividend 100 Index. That bogey holds 100 stocks that have paid dividends for at least 10 consecutive years and demonstrate the financial strength to keep doing so. Companies like PepsiCo PEP and Verizon VZ have been core holdings for years and represent the portfolio well with their healthy balance sheets, durable cash flows, and a commitment to returning capital to shareholders. If your portfolio has drifted too heavily into growth and technology, SCHD can help pare that allocation. Its defensive, quality-oriented tilts tend to hold up better during downturns and be less volatile than broad market index funds that have gotten top-heavy and tech-heavy of late.

Next up is Dimensional International Value ETF DFIV. It earns a Gold rating and charges 27 basis points per year. Its fee is higher than some index funds, but significantly lower than actively managed peers. This actively managed ETF targets companies in developed international markets trading at cheap valuations. Rather than tracking an index, the ETF applies systematic factor tilts toward value, profitability, and smaller market capitalizations. It also allows traders to be flexible in implementing the strategy. This is a key feature since some international stocks can be difficult or expensive to transact. Dimensional does its best to sidestep these costs. DFIV may be a great way to restore balance in your international sleeve if stellar performance in a few foreign stocks has left your portfolio lopsided. Tilting toward cheaper stocks with favorable characteristics should provide a long-term performance edge, too.

The last ETF up should be as steady as can be. Vanguard Short-Term Treasury ETF VGSH earns a Gold rating and charges just 4 basis points, making it a worthy ballast in any portfolio. It tracks the Bloomberg 1-3 Year US Treasury Index, which holds Treasury bonds with one to three years remaining to maturity, weighted by market value. That conservative construction limits both credit and interest rate risk. With an average effective duration of less than 2.0 years, the ETF is well insulated from the kind of rate volatility that has rattled longer-duration bond funds in recent years. For investors who want to reduce equity risk without taking much duration or credit exposure, VGSH is a compelling option. It won’t deliver dramatic returns, but it’s an excellent ballast that can stabilize a portfolio that has drifted too heavily into stocks.

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