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ETFs can help investors diversify their portfolio through a single investment product

Exchange-traded funds (ETFs) are investment funds that trade on stock exchanges, similar to individual stocks, and typically track an index, sector, commodity, or asset class. They offer investors diversification, as a single ETF can hold a broad mix of securities, reducing risk compared to investing in individual stocks. ETFs also tend to have lower expense ratios than actively managed mutual funds and provide liquidity, allowing investors to buy and sell shares throughout the trading day at market prices.

Key Takeaways

• Leading ETFs offer investors an opportunity to broadly diversify their holdings through a single investment with a low expense ratio and/or higher returns compared to competitors.
• We screened for the equity, bond, fixed income, commodities, and currency ETFs providing the highest one-month total returns for March 2025.
• These funds include CQQQ, ZROZ, ELD, UNG, FXY

Below, we outline the top equity, bond, fixed income, commodities, and currency ETFs that generated the highest returns over the last month. We have excluded leveraged and inverse ETFs, as well as funds with less than $50 million in assets under management (AUM).

All data are current as of Feb. 25, 2025.

Equity ETF with the Best 1-Month Return: Invesco China Technology ETF (CQQQ)

• One-month performance: 26%
• Expense Ratio: 0.65%
• Annual Dividend Yield: 0.23%
• 30-Day Average Daily Volume: 674,130
• Assets Under Management (AUM): $975 million
• Inception Date: Dec. 8, 2009
• Issuer: Invesco

The Invesco China Technology ETF (CQQQ) tracks the FTSE China Incl A 25% Technology Capped Index, investing at least 90% of its assets in Chinese technology stocks. The ETF provides exposure to China’s tech sector and is rebalanced quarterly. As of Feb. 24, its biggest holdings were in shares of Tencent Holdings Ltd, PDD Holdings Inc ADR (PDD), and Meituan.

Bond ETF with the Best 1-Month Return: PIMCO 25+ Year Zero Coupon US Treasury Index Exchange-Traded Fund (ZROZ)

• One-month performance: 4.6%    
• Expense Ratio: 0.15%
• Annual Dividend Yield: 4.54%
• 30-Day Average Daily Volume: 342,904
• Assets Under Management (AUM): $1.54 billion
• Inception Date: Oct. 30, 2009
• Issuer: Allianz Investment Management LLC

This fund seeks to closely track the total return of the BofA Merrill Lynch Long Treasury Principal STRIPS Index before fees and expenses. It provides exposure to long-term U.S. Treasuries, offering yield and duration benefits while potentially reducing trading costs.

Fixed Income ETF with the Best 1-Month Return: WisdomTree Emerging Markets Local Debt Fund (ELD)

• One-month performance: 3.9%
• Expense Ratio: 0.55%
• Annual Dividend Yield: 5.5%
• 1 Month Avg. Volume: 8,317
• Assets Under Management (AUM): $63.6 million
• Inception Date: Aug. 9, 2010
• Issuer: WisdomTree, Inc.

The WisdomTree Emerging Markets Local Debt Fund (ELD) aims to generate high total returns through income and capital appreciation by investing in locally denominated debt from emerging market countries. The ETF’s constituent countries include Brazil, Chile, Colombia, Mexico, Peru, Poland, Romania, Russia, South Africa, Turkey, China, Indonesia, Malaysia, South Korea, and Thailand.

Commodities ETF with the best 1-Month Return: United States Natural Gas Fund LP (UNG)

• One-month performance: 20.5%
• Expense Ratio: 1.06%
• Annual Dividend Yield: N/A
• 30-Day Average Daily Volume: 8,098,913
• AUM: $776.7 million
• Inception Date: April 18, 2007
• Issuer: Marygold

The United States Natural Gas Fund (UNG) is an ETF designed to closely track the daily price movements of natural gas using its Benchmark Futures Contract, primarily the near-month natural gas futures trading on the NYMEX. UNG had a strong one-month performance, as natural gas prices have continued to rally in the face of colder-than-anticipated temperatures across the U.S. and
electricity generation demand from AI.

Currency ETF with the Best 1-Month Return: Invesco Currency Shares Japanese Yen Trust (FXY)

• One-month performance: 4.67% 
• Expense Ratio: 0.4% 
• Annual Dividend Yield: N/A
• 30-Day Average Daily Volume: 204,370 
• AUM: $441 million 
• Inception Date: Feb. 12, 2007
• Issuer: Invesco

The Invesco Currency Shares Japanese Yen Trust (FXY) is an ETF designed to track the price of the Japanese yen through physical yen holdings. The yen serves as Japan’s national currency and is managed by the Bank of Japan, the country’s central bank. The Yen has been rallying recently based on speculation that the Bank of Japan could raise interest rates twice more this year if inflation continues to be elevated.

How We Chose the Best ETFs

We selected the best ETFs across five areas of focus—equities, bonds, fixed-income, commodities, and currencies—utilizing a screener by VettaFi. In each case, we sorted ETFs according to the specified category and ranked them by highest one-month returns. We then filtered out any ETFs that employ a leveraged or inverse strategy, as well as any with less than $50 million in assets under management. Finally, for currencies ETFs, we excluded any funds focused on cryptocurrencies from our screen.

How to Invest in ETFs

To invest in ETFs, start by researching and selecting an ETF that aligns with your financial goals, risk tolerance, and investment strategy—whether it tracks a broad market index, a specific sector, or a commodity. Open a brokerage account with a platform that offers ETF trading, then place an order
just like you would for a stock. Consider factors such as expense ratios, liquidity, and tracking accuracy to ensure you’re getting the best value for your money. Depending on your time horizon and risk tolerance, ETFs typically require minimal maintenance and are often considered long-term, buy-and-hold investments.

The Bottom Line

ETFs are versatile and cost-effective investment options that provide diversification, liquidity, and tax efficiency, making them ideal for both new and experienced investors. With minimal maintenance required, they offer a simple way to gain exposure to broad markets or specific sectors while managing risk.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above ETFs.

These are the top AI stocks based on best value, fastest growth, and most momentum.

February was a turbulent month for AI stocks, driven by the emergence of Chinese startup DeepSeek, which launched an AI assistant aiming to compete with OpenAI and challenge assumptions about the cost and infrastructure required to develop competitive AI models. That triggered a sharp pullback in Nvidia (NVDA) shares.

Microsoft (MSFT) also announced the cancellation of planned AI data center leases, reinforcing speculation of a slowdown in AI demand. Meanwhile, Palantir Technologies (PLTR), which had previously surged on strong AI-driven momentum, tumbled 27% from its all-time high following announced government spending.

Below is an analysis of the top AI stocks for March 2025, screened for best value, fastest growth, and most momentum. All stocks are listed on the Nasdaq or New York Stock Exchange.

All data are current as of Feb. 24, 2025.

Best-Value AI Stocks

Value investing is about finding stocks trading below their true worth, with the expectation that the market will eventually correct the mispricing and the stock price will rise. Investors often use price-to-earnings (P/E) ratio to find stocks that are undervalued, as a lower P/E ratio can indicate that a company is valued at less than its fundamental value.

However, it may take multiple quarters or years before a turnaround materializes.  Some stocks may also remain cheap for a reason, falling into a “value trap,” continuing to underperform despite appearing undervalued. Moreover, the P/E ratio should not be viewed in isolation. Investors should ask why a stock is trading at a discount to its peers and whether that gap is likely to close due to a business recovery, or the market recognizing the value opportunity.

Best-Value AI Stocks
	Price ($)	Market Capitalization ($B)	12-Month Trailing P/E Ratio
Yiren Digital Ltd. (YRD)	6.76	0.66	2.4
i3 Verticals, Inc. (IIIV)	26.83	0.9	5.7
Hut 8 Corp (HUT)	16.6	1.6	8.3

• Yiren Digital Ltd: A fintech company based in China, Yiren Digital operates a financial marketplace connecting investors with borrowers. The company offers payment processing, loan services, insurance products, and ecommerce products. On Feb. 18, Yiren announced it had integrated DeepSeek’s AI technology to enhance operational efficiency, streamline workflows, and improve customer interactions across financial and lifestyle services in China.
• i3 Verticals, Inc: i3 Verticals specializes in developing and acquiring software solutions for the public sector and health care markets. Currently, i3 boasts a number of AI solutions for different industries such as retail, restaurants, and commercial applications. For instance, i3’s intelligent video surveillance system identifies objects, tracks customer behavior, and integrates with point-of-sale data to refine operational strategies for the retail channel.
• Hut 8 Corp. Hut 8 is an energy infrastructure operator and Bitcoin miner with operations across North America, primarily in Canada, New York, and Texas. While primarily a Bitcoin-mining operation, Hut 8 currently has 3.4 megawatts of capacity dedicated to high-performance computing.

Fastest-Growing AI Stocks

Growth investors look for companies with increasing revenue and earnings per share (EPS), believing these metrics signal strong business fundamentals and potential for value appreciation. However, relying on just one of these indicators can present an incomplete picture, as factors like tax law changes, mergers, or one-time gains can distort the numbers.

For a more balanced assessment, we screen AI growth stocks by looking at the most recent year-over-year percentage growth for both revenue and EPS, giving each equal weighting. We also excluded companies with growth rates in either category of 1,000% or more on the grounds that these are likely outliers.

Fastest-Growing AI Stocks
	Price ($)	Market Cap ($B)	EPS Growth (%)	Revenue Growth (%)
Pinterest, Inc (PINS)	36.95	25	828	18
Dynatrace, Inc. (DT)	59	17.7	735	19.5
Innodata, Inc. (INOD)	59.2	1.7	501	127

• Pinterest, Inc: With over half a billion users worldwide, Pinterest is a visual search and discovery platform that aims to help people find inspiration, curate ideas, and shop for products. An early adopter of AI, Pinterest acquired THE YES in June 2022, an AI-powered shopping platform that delivers a personalized feed to users based on their input on brand, style, and size.
• Dynatrace, Inc: Dynatrace provides AI-powered solutions to help businesses monitor, analyze, and optimize their digital ecosystems, allowing customers to detect issues in real time and improve system performance. Dynatrace has expanded its AI engine, enabling organizations to predict and prevent IT issues before they occur.
• Innodata, Inc: Innodata is a global data engineering company that offers services in data curation, transformation, and large language model data sets, as well as consulting along the AI value chain. Driven by strong AI demand, the company reported a 96% increase in revenues for fiscal year 2024 compared to 2023, while deepening its partnership with big tech customers.

AI Stocks With the Most Momentum

Momentum investing is a strategy that seeks to capitalize on existing market trends by investing in stocks that have recently outperformed their peers or the broader market. The core idea is that stocks on an upward trajectory are likely to continue rising as long as the fundamental drivers
behind their growth remain intact.

The momentum strategy has become synonymous with AI, owing to the fast growth of this sector. AI names can generate returns that far outpace established tech names, driven mostly by investor sentiment. While it’s a viable strategy for those with a higher risk tolerance, investors should also focus on the company’s underlying financials to ensure the anticipated growth prospects will materialize.

Here are the AI stocks with the highest total return in the last 12 months.

	Price ($)	Market Cap ($B)	12-Month Trailing Total Return (%)
Quantum Computing, Inc. (QUBT)	6.9	0.94	747
VNET Group, Inc. (VNET)	13.3	3.9	746
Kingsoft Cloud Holdings Ltd. (KC)	18.5	5.2	491

• Quantum Computing, Inc: Quantum Computing is an integrated photonics and quantum technology company focused on developing accessible and affordable quantum computing solutions. Company CEO William McGann recently highlighted the company’s plans to commercialize its technology, advance its thin-film lithium niobate (TFLN) chip fabrication facility, and expand strategic partnerships in AI.
• VNET Group, Inc: VNET serves over 7,500 enterprise customers across more than 30 cities in China, offering data center hosting, cloud solutions, and internet security services. The company recently announced strong third-quarter 2024 reports, driven by rising AI demand. 
• Kingsoft Cloud Holdings, Ltd: Kingsoft is a leading cloud service provider in China. In its third quarter 2024 earnings report, Kingsoft announced the continued expansion of its AI business, which now accounts for 31% of the company’s public cloud revenues.

Advantages of AI Stocks

Mass Disruption

AI is a rapidly evolving sector with applications across nearly every industry, from health care to finance and cybersecurity. As adoption accelerates, AI companies have significant room for revenue expansion and market dominance. Furthermore, ongoing advancements in research and development are enhancing AI models’ reasoning and adaptability, unlocking even greater disruptive potential.

Innovation

AI-driven automation enhances efficiency, leading to reduced costs for businesses. Companies leading in AI development can secure long-term competitive advantages, making them attractive investments in both the short and long term.

Investor Enthusiasm

AI stocks often experience strong investor enthusiasm, driving rapid price appreciation. With ongoing advancements in machine learning, automation, and generative AI, market sentiment remains highly bullish, fueling momentum-driven gains.

Disadvantages of AI Stocks

High Valuations and Market Speculation

Many AI stocks trade at high valuations due to investor enthusiasm and growth expectations. While the AI sector has strong long-term potential, some companies may be overvalued, leading to the risk of significant price corrections. Speculative investments, particularly in early-stage AI companies, can result in inflated valuations that may not be supported by actual revenue or profitability.

Regulatory Risks

AI technology is increasingly facing scrutiny from governments and regulatory bodies worldwide. Concerns over data privacy, algorithmic bias, job displacement, and national security risks could lead to stricter regulations that impact operations and growth prospects. The legal landscape around AI is still in its early stages, and new laws around transparency, intellectual property rights, and ethical AI development are being fleshed out.

Stiff Competition

The AI industry is highly competitive, with major players such as Alphabet (GOOGL), Microsoft (MSFT), Nvidia (NVDA), and OpenAI continuously advancing their technologies. This rapid pace of innovation means that companies that fail to stay ahead may become obsolete. Additionally, emerging AI startups such as DeepSeek can disrupt established players seemingly overnight, making it difficult for investors to predict long-term trends.

The Bottom Line

AI stocks offer significant growth potential, fueled by rapid technological advancements and strong investor enthusiasm. However, high valuations, regulatory uncertainties, and intense competition pose risks that investors must carefully navigate. While AI remains a compelling long-term investment, careful scrutiny of a company’s financials and thorough risk management are essential to avoid speculative bubbles and hype.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.

February saw a sharp selloff in leading tech names, with Nvidia (NVDA) pulling back as competition intensified, particularly from Chinese startup DeepSeek’s new AI chatbot, which aims to challenge OpenAI’s dominance. Meanwhile, shares of Palantir Technologies (PLTR) tumbled 27% from all-time highs following announcements of federal budget cuts, as government contracts account for 40% of the company’s revenue.

The Technology Select Sector SPDR Fund (XLK) ended the month flat, as the broader AI selloff and economic uncertainty weighed on the sector, driven by tariff threats between the U.S. and its trading partners.

Below is an analysis of the top tech stocks for March 2025, screened for best value, fastest growth, and most momentum. All stocks are listed on the Nasdaq or New York Stock Exchange. We excluded stocks with a price under $5, an average daily trading volume of less than 100,000, and a market capof less than $300 million.

All data are current as of Feb. 25, 2025.

Best-Value Tech Stocks

Value investing is about finding stocks trading below their true worth, with the expectation that the market will eventually correct the mispricing. Investors often use price-to-earnings (P/E) ratio, looking for stocks with a low P/E ratio to uncover value. Typically, a lower P/E ratio signals an undervalued stock because it means the company is valued less than its fundamental value. These stocks may offer a stronger return after the market adjusts.

However, bargain hunters must exercise patience, as it may take multiple quarters (or years) before a turnaround materializes. Some stocks may also remain cheap for a reason, falling into a “value
trap,” continuing to underperform despite appearing undervalued. Moreover, the P/E ratio should not be viewed in isolation. Investors should ask why a stock is trading at a discount to its peers and whether that gap is likely to close due to a business recovery, or the market recognizing the value
opportunity.

Best-Value Tech Stocks
	Price ($)	Market Capitalization ($B)	12-Month Trailing P/E Ratio
Yiren Digital Ltd. (YRD)	6.76	0.66	2.4
DoubleDown Interactive Co., Ltd. (DDI)	9.79	0.5	4
I3 Verticals, Inc. (IIIV)	26.83	0.9	5.7

• Yiren Digital Ltd: A fintech company based in China, Yiren Digital operates a financial marketplace connecting investors with borrowers. The company offers payment processing, loan services, insurance products, and ecommerce products. On Feb. 18, Yiren announced it had integrated DeepSeek’s AI technology to enhance operational efficiency, streamline workflows, and improve customer interactions across financial and lifestyle services in China.
• DoubleDown Interactive Co., Ltd Double Down is a gaming company that makes apps for mobile and desktop players. Their three most popular products are DoubleDown Casino, DoubleDown Fort Knox, and DoubleDown Classic Slots. The company ended fiscal year 2024 with 1.36 million average monthly active users, down from 1.75 million the year prior, though average revenue per user increased to $1.30 from $1.09 across the same time period. 
• i3 Verticals, Inc: i3 Verticals specializes in developing and acquiring software solutions for the public sector and health care markets. During its first quarter 2025, i3 saw annualized recurring revenues grow 7.6% compared to first quarter 2024.

Fastest-Growing Tech Stocks

Growth investors look for companies with increasing revenue and earnings per share (EPS), believing these metrics signal strong business fundamentals and potential for value
appreciation. However, relying on just one of these indicators can present an incomplete picture, as factors like tax law changes, mergers, or one-time gains can distort the numbers.

While growth investing offers the potential for high returns, it also comes with risks, such as inflated valuations, market volatility, and companies failing to sustain rapid expansion. Investors should
be cautious of excessive hype, unsustainable growth rates, and external economic factors that could impact performance. For a more balanced assessment, we employ a dual-metric approach. We equally weight the most recent year-over-year (YOY) percentage growth in both revenue and earnings per share (EPS), giving each consideration to provide a clearer view of each company’s true growth trajectory. In addition, we exclude companies that exhibit extraordinarily high growth rates—specifically, those with quarterly growth exceeding 1,000%—since these are outliers not likely on a sustainable trendline.

Fastest-Growing Tech Stocks
	Price ($)	Market Cap ($B)	EPS Growth (%)	Revenue Growth (%)
Pinterest, Inc (PINS)	36.95	25	828	18
Sportradar Group AG (SRAD)	21.35	6.4	795	28
Dynatrace, Inc. (DT)	59	17.7	735	19.5

• Pinterest, Inc: With over half a billion users worldwide, Pinterest is a visual search and discovery platform that allows people to find inspiration, curate ideas, and shop for products. 2024 was a banner year for Pinterest, with the company achieving its first $1 billion revenue quarter and a record 553 million monthly active users.
• Sportradar Group AG: Sportradar Group AG is a global sports technology company that provides data analytics, betting solutions, and media services to sports organizations, media outlets, and sportsbooks. On Feb. 7, Sportradar announced a long-term extension and expansion of their partnership with Major League Baseball to 2032, with MLB acquiring an equity stake in Sportradar.
• Dynatrace, Inc: Dynatrace provides AI-powered solutions to help businesses monitor, analyze, and optimize their digital ecosystems, allowing customers to detect issues in real time and improve system performance. Dynatrace has expanded its AI engine to shift enterprises from reactive AI solutions to preventive operations, enabling organizations to predict and prevent IT issues before they occur.

Tech Stocks With the Most Momentum

Momentum investing is a strategy that seeks to capitalize on existing market trends by investing in stocks that have recently outperformed their peers or the broader market. The core idea is that stocks on an upward trajectory are likely to continue rising as long as the fundamental drivers
behind their growth remain intact.

This strategy is particularly popular in the tech sector, where innovation, product launches, and market disruptions often lead to rapid stock price appreciation. However, investors must carefully monitor stock valuations, as fast-rising stocks often outpace their fundamentals. When valuations become overstretched, they can form speculative bubbles that are vulnerable to sharp selloffs if market sentiment shifts. Here are the tech stocks with the highest total return in the last 12 months.

Tech Stocks With the Most Momentum
	Price ($)	Market Cap ($B)	12-Month Trailing Total Return (%)
Red Cat Holdings, Inc. (RCAT)	7	0.6	912
Quantum Computing, Inc. (QUBT)	6.9	0.94	747
VNET Group, Inc. (VNET)	13.3	3.9	746

• Red Cat Holdings, Inc: Red Cat is a drone technology company specializing in integrating robotic hardware and software for military, government, and commercial applications. On Feb. 12, Red Cat announced that it had raised up to $20 million in debt financing and applied for $58 million in debt financing from the Department of Defense Office of Strategic Capital.
• Quantum Computing, Inc: Quantum Computing is an integrated photonics and quantum technology company focused on developing accessible and affordable quantum computing solutions. Quantum Computing CEO William McGann recently highlighted the company’s plans to commercialize its technology, open a facility for making thin film lithium niobate (TFLN) chips, and expand strategic partnerships in AI.
• VNET Group, Inc.: VNET serves over 7,500 enterprise customers across more than 30 cities in China, offering data center hosting, cloud solutions, and internet security services. The company recently announced a strong third quarter of 2024 thanks to the success of its data center hosting business, driven by rising AI demand.

Advantages of Tech Stocks

Growth Potential

Tech companies, especially those in emerging sectors like artificial intelligence, cloud computing, and cybersecurity, often experience rapid revenue and earnings growth. Many tech firms have scalable business models that allow them to expand globally, while maintaining high gross margins.

Innovation

The tech industry is constantly evolving, with companies pioneering groundbreaking innovations that reshape entire industries. Investors in leading tech firms can benefit from major technological shifts, such as AI, and automation, creating long-lasting competitive advantages.

Recurring Revenues

Many tech companies, particularly those in software, cloud computing, and digital services, operate on subscription-based or recurring revenue models, ensuring more stable and predictable cash flows. These models provide businesses with greater revenue visibility, reduce dependence on one-time sales, and enhance customer retention through long-term contracts and service integrations. Additionally, recurring revenue helps mitigate economic downturns by offering consistent income streams, while also enabling companies to reinvest in research, development, and expansion

Disadvantages of Tech Stocks

Volatility

Tech stocks are known for their high volatility because rapid technological changes and competitive pressures can lead to significant price fluctuations. They often carry high valuations based on growth expectations, making them susceptible to market corrections if they fail to meet these
projections. Furthermore, regulatory challenges and geopolitical tensions can impact the sector, introducing additional risks and uncertainties for investors.

Valuation Risks

Owing to their high growth potential, many tech companies trade at high earnings or revenue multiples, making them susceptible to overvaluation. If growth expectations do not materialize, these stocks can experience sharp declines, leading to potential losses for investors. Moreover,
early-stage tech companies often allocate a significant portion of their capital to staffing and marketing to sustain their high growth rates. As a result, they tend to remain unprofitable in their initial stages, often relying on outside capital to fund expansion, despite achieving higher gross margins than companies in non-technology sectors.

Regulatory and Competitive Challenges

The tech industry faces increasing scrutiny from regulators on issues like data privacy,
antitrust concerns, and cybersecurity. Tech giants such as Meta Platforms (META)
and Alphabet Inc (GOOGL) are no strangers to regulatory probes and fines.  Additionally, competition is fierce, with companies constantly innovating to maintain their market position, which can erode profitability and market share over time.

The Bottom Line

Tech stocks offer compelling investment opportunities due to their high growth potential, continuous innovation, and recurring revenue models, making them a dominant force in the global economy. AI is set to be a major driver of technological advancements in 2025, with the potential to
disrupt all major industries. However, the sector can be volatile, with regulatory scrutiny expected to increase along with innovation. Investors should exercise caution, ensuring that even the most promising tech stocks are evaluated critically to avoid getting caught up in market bubbles or
speculative hype.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.

VWAGY, TM, and STLA lead the 10 biggest car companies list

Reviewed by Gordon Scott
Fact checked by Vikki Velasquez

The automotive industry is a crucial part of the global economy, producing vehicles that efficiently transport people and goods within nations and across entire regions. These companies manufacture cars, trucks, vans, and sport utility vehicles (SUVs). Some even produce motorcycles, all-terrain vehicles (ATVs), and commercial vehicles like transport trucks and buses.

The biggest auto manufacturers have a large global footprint, selling vehicles to consumers and businesses worldwide. These big companies are mainly headquartered in just a few countries that lead the industry; however, the list of the 10 biggest also includes car companies from other countries.

We look in detail below at the 10 biggest car companies by trailing 12 months (TTM) revenue as of February 2025. Some companies outside the United States report profits semiannually instead of quarterly, so the TTM data may be older than it is for companies that report quarterly. This list is limited to publicly traded companies in the U.S. or Canada, either directly or through American depositary receipts (ADRs).

Important

Some of the stocks below are only traded over the counter (OTC) in the U.S., not on exchanges. This may be because they are foreign companies that do not have sponsored ADRs on traditional exchanges. As a result, trading OTC stocks often carry higher trading costs than trading stocks on exchanges. Additionally, these stocks may be subject to foreign exchange fluctuations. This can lower or even outweigh potential returns.

1. Volkswagen AG (VWAGY)

• Revenue (TTM): $324.46 billion
• Net Income (TTM): $12.25 billion
• Market Cap: $55.2 billion
• 1-Year Return (TTM): -24.2%
• Exchange: OTC

Volkswagen (VWAGY) is a Germany-based multinational automotive manufacturing company. It develops and produces passenger cars, trucks, and light commercial vehicles such as buses. Vehicle models include the Tiguan, Golf, Jetta, Passat, and more. The company stopped making its once-popular Volkswagen Beetle compact car in 2019 due to falling demand for smaller cars. Volkswagen’s best-known luxury brands are Porsche and Audi. The company also manufactures parts and offers customer financing and fleet management services.

2. Toyota Motor Corp. (TM)

• Revenue (TTM): $310.27 billion
• Net Income (TTM): $33.84 billion
• Market Cap: $‪243.3 billion
• 1-Year Return (TTM): -23.7%
• Exchange: New York Stock Exchange (NYSE)

Toyota (TM) is a Japan-based multinational. It was the first foreign manufacturer to build a dominant market share in the U.S. automobile market by setting the industry standard for efficiency and quality. Toyota designs and manufactures cars, trucks, minivans, and commercial vehicles. Vehicle models include the Corolla, Camry, 4Runner, Tacoma, and the Prius, the hybrid electric sedan. Lexus is the company’s luxury car division. Toyota also produces parts and accessories and provides dealers and customers with financing.

3. Stellantis (STLA)

• Revenue (TTM): $156.88 billion
• Net Income (TTM): $5.52 billion
• Market Cap: $37.7 billion
• 1-Year Return (TTM): -48.0%
• Exchange: NYSE

Stellantis (STLA) is a multinational automaker that was created in 2021 through the merger of French automaker Groupe PSA and Italian-American automaker FCA (Fiat Chrysler Automobiles). The company is one of the largest automakers in the world, with a strong presence in Europe, North America, and South America. Stellantis offers a wide range of vehicles, including passenger cars, trucks, vans, and SUVs, under various brands including Peugeot, Citroën, DS, Opel, Vauxhall, Jeep, Ram, Dodge, and Chrysler. The company is headquartered in Amsterdam, Netherlands.

4. Mercedes-Benz AG (MBGYY)

• Revenue (TTM): $147.95 billion
• Net Income (TTM): $10.84 billion
• Market Cap: $60.5 billion
• 1-Year Return (TTM): -14.8%
• Exchange: OTC

Mercedes-Benz (MBGYY) is a German-based multinational automobile manufacturer. The company manufactures passenger cars, vans, off-road vehicles, and commercial vehicles like transport trucks and buses.

5. Ford Motor Co. (F)

• Revenue (TTM): $184.99 billion
• Net Income (TTM): $5.88 billion
• Market Cap: $37.8 billion
• 1-Year Return (TTM): -17.8%
• Exchange: NYSE

Ford (F) is a multinational automotive manufacturer based in Michigan. The company develops, manufactures, and services cars, SUVs, vans, and trucks. Vehicle models include the Mustang, Edge, Escape, F-150, Ranger, and more. The company also provides vehicle-related financing and leasing.

6. General Motors (GM)

• Revenue (TTM): $187.44 billion
• Net Income (TTM): $7.19 billion
• Market Cap: $48.8 billion
• 1-Year Return (TTM): +22.1%
• Exchange: NYSE

General Motors (GM) is a multinational automobile manufacturer. The company designs and manufactures cars, trucks, and automobile parts. It has been a leader in the development of electric cars, first with the Chevy Volt and its successor, the Chevy Bolt. It operates under four major vehicle brands: GMC, Chevrolet, Cadillac, and Buick. The company also offers automotive financing.

7. Honda Motor Co. Ltd. (HMC)

• Revenue (TTM): $144.43 billion
• Net Income (TTM): $6.90 billion
• Market Cap: $45.3 billion
• 1-Year Return (TTM): -21.1%
• Exchange: NYSE

Honda (HMC) is a Japan-based multinational automobile company. It manufactures passenger cars, trucks, vans, all-terrain vehicles, motorcycles, and related parts. Vehicle models include the Civic, Accord, Insight Hybrid, Passport, Odyssey, and more. Acura is the company’s luxury car division. The company also provides financial and insurance services.

8. Tesla Motors (TSLA)

• Revenue (TTM): $97.69 billion
• Net Income (TTM): $7.13 billion
• Market Cap: $942.3 billion
• 1-Year Return (TTM): +45.0%
• Exchange: Nasdaq

Tesla (TSLA) is a manufacturer of electric vehicles and clean energy solutions. Tesla manufactures five electric models: the Model 3, Model S, Model X, Model Y, and Cybertruck. Each model is capable of speeds of more than 135 miles per hour and can accelerate from 0 to 60 in less than 4.8 seconds. Most have a range of more than 310 miles. Tesla provides financing for retail customers.

9. Nissan Motors (NSANY)

• Revenue (TTM): $84.03 billion
• Net Income (TTM): $706.5 million
• Market Cap: $10.7 billion
• 1-Year Return (TTM): -25.7%
• Exchange: OTC

Nissan (NSANY) is a Japan-based multinational automotive company. It designs and manufactures passenger vehicles and related parts. Vehicle models include the Altima, Maxima, Sentra, Versa, Pathfinder, Rogue, Titan, and its LEAF electric car. The company’s luxury division is Infiniti. The company also offers financing and leasing services.

10. BYD Co. Ltd. (BYDDY, BYDDF)

• Revenue (TTM): $682.2 billion
• Net Income (TTM): $33.8 billion
• Market Cap: $146.5 billion
• 1-Year Return (TTM): +90.3%
• Exchange: OTC

BYD Co. Ltd. (BYDDY, BYDDF) is a Chinese multinational corporation that specializes in the design, development, and manufacture of a wide range of products, including electric vehicles, batteries, solar panels, and other renewable energy products. The company is headquartered in Shenzhen, China, and has operations in more than 70 countries around the world. BYD is known for its leadership in the electric vehicle industry and has a strong presence in both the passenger car and commercial vehicle markets. In addition to its core businesses, BYD also has a significant presence in the renewable energy sector and is a leading supplier of solar panels and energy storage systems.

The founders of Tulsa’s Greenwood District

Reviewed by Caitlin Clarke
Fact checked by Kirsten Rohrs Schmitt

The following is an excerpt from Black Fortunes: The Story of the First Six African Americans Who Escaped Slavery and Became Millionaires, by Shomari Wills, which details the origins of Black Wall Street.

Ottawa W. Gurley (aka O.W.) was a turn-of-the-20th-century Black educator, entrepreneur, and landowner who was born to former enslaved Africans. In 1889, after resigning from a position he held with the Grover Cleveland presidential administration, O.W. moved from his home state of Arkansas to Perry, Okla., in order to participate in the Oklahoma Land Grab of 1889. With his wife Emma, he later relocated to Tulsa to seize economic opportunities resulting from the city’s multiracial population boom. Once there, O.W. purchased a 40-acre tract of undeveloped land, where he built a grocery store on a dirt road that ran just north of the train tracks traversing the city.

O.W. later forged a partnership with fellow Black businessman John the Baptist Stradford (aka J.B.), with whom he shared a general distrust of White people. Both men chose to go by their initials instead of their first names. This action was a form of silent protest because men in the South were customarily addressed by their surnames, while boys were called by their first names. Sadly, White men often addressed Black men by their first names as a form of emasculation. By using their initials, O.W. and J.B. circumvented this practice.

O.W. and J.B. occasionally held divergent opinions. For example, while O.W. subscribed to the philosophies of African American educator Booker T. Washington, J.B. favored the more radical views of civil rights activist W. E. B. Du Bois. Despite their differences, the pair worked in lockstep to develop an all-Black district in Tulsa. They subdivided the land into housing zones, retail lots, alleys, and streets, all of which were exclusively available to other African Americans who were fleeing lynchings and other racial horrors.

Key Takeaways

• Ottawa W. Gurley was a Black educator, entrepreneur, and landowner who was born to former enslaved Africans.
• At the beginning of the 20th century, he bought 40 acres of land in Tulsa, Okla.
• Gurley forged a partnership with Black businessman John the Baptist Stradford, and the two developed an all-Black district in Tulsa, which became known as Greenwood.
• When hundreds of African Americans moved to Greenwood for the oil boom, the two became increasingly wealthy.
• Greenwood’s prosperity became legendary in Black America, with Booker T. Washington dubbing it “Black Wall Street.”

The Origin of Greenwood

After O.W. built several square two-story brick boardinghouses near his grocery store, he called the street on which these structures sat Greenwood Avenue, after the Mississippi town from which many of his early residents hailed. Before long, the entire area became known as Greenwood, which soon became the site for a school, as well as an African Methodist Episcopal Church. But O.W.’s crowning project was the Gurley Hotel, whose high quality rivaled that of the finest White hotels in the state.

As hundreds of African Americans emigrated to Greenwood for the oil boom, O.W. and J.B. became increasingly wealthy, with O.W. boasting a reported net worth of $150,000 ($3.6 million adjusted for inflation). O.W. leveraged this fortune to launch a Black Masonic lodge and an employment agency while bankrolling efforts to resist Black voter suppression in the state.

Pushback Within the African American Community

O.W. was eventually appointed as a sheriff’s deputy by the city of Tulsa, where he was responsible for policing the Black population in Greenwood. But as O.W. became increasingly cozy with the White establishment, many members of Tulsa’s Black community began to resent him. In fact, in the Black Star newspaper, its militant Black publisher A.J. Smitherman pejoratively referred to O.W. as “The King of Little Africa.”

Nevertheless, White developers began to emulate O.W. and J.B. by purchasing plots of land located north of the railroad tracks and selling them back to members of the Black community. By 1905, a Black doctor and a Black dentist had launched practices there. The creation of more schools, several hardware stores, and a Baptist church soon followed. Throughout this time, segregation was increasing, as Blacks converged on the north side of the train tracks, while Whites converged on the south side.

When the Oklahoma territory achieved statehood in 1907, segregationist Democrats, led by the White supremacist Bill “Alfalfa” Murray, passed laws that criminalized interracial marriage and prohibited Blacks from obtaining high-wage jobs. These injustices affirmed O.W. and J.B.’s decision to establish a Black-centric community, where Black men and women were shielded from racial hostilities. If White people made threateningly racist remarks, Greenwood’s Black residents often responded aggressively. For example, in 1909, J.B. was walking along Greenwood Avenue when a White deliveryman uttered a racist insult, prompting J.B. to throw the man to the ground, straddle him, and punch his face until it was bloody. J.B. was criminally charged for the beating but was acquitted.

On a separate occasion, J.B. was kicked off a train in Oklahoma for sitting in the first-class car—even though he’d purchased a first-class ticket. When he was asked to move to the Black-only car, he refused to comply. He later filed a lawsuit in an effort to desegregate Tulsa’s trains but was unsuccessful.

Greenwood Prospers

As segregation grew stronger, Greenwood’s Black business district thrived, mainly because residents fed their purchasing dollars back into the local economy while earning their incomes from White employers. This was possible because the migration of oilmen to Tulsa created a spike in demand for domestic help, which enabled Black residents to attain high-paying labor jobs as maids, chauffeurs, gardeners, janitors, shoe shiners, and porters. These workers often earned enough money to send their children to universities like Columbia Law School, Oberlin College, the Hampton Institute, the Tuskegee Institute, Spelman College, and Atlanta University, which positioned them to secure white-collar jobs after graduation.

Greenwood’s prosperity became legendary in Black America, with Booker T. Washington dubbing it “Black Wall Street.”

What Did JB Stradford Do?

JB Stratford founded “Black Wall Street”, together with Ottawa W. Gurley in the early 20th century. Located in Tulsa, Oklahoma, hundreds of Black Americans moved to the thriving district during the oil boom, while the founders amassed greater fortunes.

What Was Black Wall Street Famous For?

Black Wall Street, located in the Greenwood neighbourhood in Tulsa, Oklahoma was one of America’s most prosperous business districts in the early 20th century. The district became an economic powerhouse, with independent schools, banks, hotels, and transit systems.

Who Bought the Land for Black Wall Street?

O.W. Gurley purchased 40 acres of land in 1906 in the Greenwood District of Tulsa, Oklahoma. During that time, Black ownership of land was unheard of. As the business district expanded and thrived, Gurley grew to own 100 of the 600 businesses in operation.

The Bottom Line

Black Wall Street became an enclave for Black entrepreneurs and a gateway for economic prosperity. As a self-sustaining district, it became a beacon of wealth for business owners, while establishing independent school systems and public services. At the time, several millionaires emerged out of the thriving metropolis.

Through 1910 to 1920, the population of the Greenwood district almost quadrupled to 72,000, spanning to 35 city blocks. Thanks to the vision and partnership of founders O.W. Gurley and JB Stradford, the boomtown of Black Wall Street became the nation’s most prosperous hub during the early 20th century.

Copyright © 2018 by Shomari Wills. Reprinted by permission of Amistad, an imprint of HarperCollins Publishers.

There are big differences in how wealth is distributed across the U.S.

Reviewed by Robert C. Kelly
Fact checked by Vikki Velasquez

The United States is arguably one of the most economically well-off places on the planet. The U.S. accounts for 30.8% of global wealth, or $139.9 trillion, according to UBS’s Global Wealth Report 2023 (the most recent report for which such data is available). The second-largest country by global wealth, China, is responsible for 18.6%, or $84.5 trillion. This makes the U.S. the richest country on Earth, in terms of total wealth.

The U.S. also has the most millionaires in the world—38% of the world’s supply, or nearly 22 million adults, according to the UBS Global Wealth Report 2024. Not surprisingly, the country with the second-highest number is mainland China, with 6 million individuals, or 10% of the world’s millionaires. Considering this seemingly limitless potential for economic prosperity, it’s not surprising that more than a million people immigrate to the U.S. each year.

However, that wealth is not distributed equally across all parts of the United States. Income inequality in the U.S. is considerable. Despite nearly $140 trillion in total wealth, 11.1% of the U.S. population lived in poverty in 2023, according to the U.S. Census Bureau.

Another inequality stamp: The median wealth per adult in the United States for 2023 was $112,157. In the highest-ranking country—Luxembourg—it was $372,258.

Key Takeaways

• The United States is the wealthiest country in the world in terms of total global wealth percentage. It also has the world’s most millionaires.
• Though the U.S. is the wealthiest country, that wealth is not distributed evenly; many states have a low median household income and high rates of poverty.
• The states with the highest median household income are Maryland, Massachusetts, and New Jersey.
• The states with the lowest median household income are Mississippi, West Virginia, and Arkansas.

Measuring Wealth: What Median Income Tells Us

Median income is a particularly good way to look at how people are doing, both nation to nation and among states in the U.S. Here’s why.

There are several ways to assess wealth in a given area. A state’s gross domestic product (GDP) offers a glimpse into its overall economic health, but not necessarily how individuals and households are doing.

Mean income (the total of all values divided by the number of values in a dataset—otherwise known as the average) is the primary mathematical value for making comparisons. However, having a large number of high-earning one-percenters or low-income people in a region can skew the end result in revealing how much money individuals earn.

The median gives you a better picture. It is determined by lining up all values in a dataset in numerical order, and then finding the “middle” value. A state’s median income is exactly halfway between what people earn on both sides of the wealth spectrum. That makes median income a much more accurate assessment of what the average American makes annually than the actual average income.

How Race and Gender Affect Income

Structural racism and sexism severely and negatively impact many Americans and their families. Here, we look at individual income to focus on how individual workers are faring.

A significant contributing factor to American income inequality is a disparity in earnings by race. The differences are stark. Controlling for other factors, a 2024 study by Payscale points to a gender pay gap for Black women of $0.80 for every $1 earned by White men. Black men earned 84.6% as much as White men (median weekly earnings) in the fourth quarter of 2024, according to the U.S. Bureau of Labor Statistics.

Additionally, Black and Hispanic families own less wealth than White families. In 2022 (the most recent data available), a typical (median) White family had a wealth of $285,000, while a typical Black family had a wealth of $44,900, and a typical Hispanic family had a wealth of $61,600.

A prominent income gap exists between men and women in the United States. Women make approximately 83 cents for every dollar of men’s wages in an uncontrolled gender pay gap, while women make 99 cents for every dollar in a controlled gender pay gap. Controlled gender pay gaps take into consideration job title, education, experience, industry, job level, and hours worked.

Contributing to these discrepancies: Men constitute 36.4% of minimum-wage workers as of 2023, while women account for just 10.4% of Fortune 500 CEOs as of 2024.

For the fourth quarter of 2024, Asian and White women earn a median of $1,367 and $1,094 per week, respectively; Black women and Hispanic or Latinas earn a median of $978 and $844 per week, respectively. Although all women were more likely to live in poverty than White men in 2019, women of color experienced a higher poverty rate than White women.

Median Household Income

One of the measures of income provided by the U.S. Census Bureau—and the one we chose to use for our state-to-state comparison—is median household (HH) income. This is the total gross income of all persons 15 years or older within a housing unit.

When the Census Bureau measures and compares how different parts of the nation are doing, “median HH Income is perhaps the single most widely used measure of income in the census,” as the Missouri Census Data Center explains. Median household income can include households with only one resident as well as those with multiple residents who are not related (i.e., roommates).

Median household income is different from two other measures that the census uses:

• Median per capita income, which looks at each individual person’s income, rather than treating a household as a singular entity
• Median family income, which only considers households with two or more people related by birth, marriage, or adoption

As of 2023, the most recent available figures, the median U.S. annual household income was $80,610.

Richest States by Median Income

The map above shows the pattern of median income across the U.S. Let’s start with a look at the richest states.

Special Consideration: District of Columbia

• Median household income: $106,287 (2023)
• Population: 702,250 (July 1, 2024)
• Unemployment rate: 5.5% (December 2024)
• Poverty rate: 14.0% (2023)

The District of Columbia is not a state, of course, but the U.S. Census Bureau includes it among the 50 states when listing median income. Its inclusion makes sense, given the fact that the District’s median income is higher than any state. As is likely unsurprising, the federal government is the largest employer in the nation’s capital.

D.C. has the highest population density in the U.S. along with the second-highest median value of owner-occupied housing units. Despite its high income and small population, D.C. also has the highest poverty rate of any of the richest states.

1. Maryland

• Median household income: $101,652 (2023)
• Population: 6.26 million (July 1, 2024)
• Unemployment rate: 3.1% (December 2024)
• Poverty rate: 9.5% (2023)

Maryland’s private-sector industries were responsible for $382.4 billion in economic output. The Free State also had the largest number of federal jobs per capita in 2020, which makes sense, given its adjacency to Washington, D.C. Both the Social Security Administration and the Food and Drug Administration are headquartered in Maryland.

2. Massachusetts

• Median household income: $101,341 (2023)
• Population: 7.13 million (July 1, 2024)
• Unemployment rate: 4.1% (December 2024)
• Poverty rate: 10.4% (2023)

Massachusetts’ economy was originally heavily dependent on agriculture and maritime trade, though manufacturing would become more prominent in the 19th century. Today, education and professional and business services employ the largest portion of the Bay State’s workforce. Its leisure and hospitality industry is also a major economic powerhouse.

3. New Jersey

• Median household income: $101,050 (2023)
• Population: 9.5 million (July 1, 2024)
• Unemployment rate: 4.6% (December 2024)
• Poverty rate: 9.7% (2023)

Not only does New Jersey have the largest population of the three richest (and the three poorest) states, but it also has the largest population density of any state in the U.S. Healthcare is the Garden State’s largest industry, adding $37 billion to the state economy and employing approximately 488,000 people. New Jersey is also the birthplace of major industries, such as organized baseball, professional basketball, movies, and passenger flights.

Poorest States by Median Income

Now, the opposite end of the spectrum. These states have the lowest median incomes.

1. Mississippi

• Median household income: $54,915 (2023)
• Population: 2.94 million (July 1, 2024)
• Unemployment rate: 3.3% (December 2024)
• Poverty rate: 18% (2023)

Despite 35% of Mississippi land being dedicated to farmland, the federal government is the fourth-biggest employer in the Magnolia State, after trade, transportation, and utilities. In addition to having the highest poverty rate of any state in the country, Mississippi is also known as the “hungriest state” in the U.S., with 20% of its population being food insecure.

2. West Virginia

• Median household income: $57,917 (2023)
• Population: 1.76 million (July 1, 2024)
• Unemployment rate: 4.2% (December 2024)
• Poverty rate: 16.7% (2023)

The Equality State is another case where the federal government is the largest employer, but this time, it hasn’t pushed enough people out of poverty. Before the COVID-19 outbreak, West Virginia’s 1938 unemployment rate was the highest in U.S. history.

3. Arkansas

• Median household income: $58,773 (2023)
• Population: 3.08 million (July 1, 2024)
• Unemployment rate: 3.4% (December 2024)
• Poverty rate: 15.7% (2023)

Agriculture makes up the Natural State’s largest industry, adding $16 billion to the state’s economy each year. Forests comprise 56% of land, 25% of which belongs to the forestry industry. Despite the low income and high poverty rate, several major companies are headquartered in Arkansas, including Tyson Foods and Walmart.

Which State Has the Highest Median Income?

The state that has the highest median income is Maryland, with a median income of $101,652 in 2023. The District of Columbia, which is not a state, has the highest median income overall, with a median income of $106,287 in 2023.

What Is Middle-Class Income?

What is considered middle-class income will depend on a person’s location. A middle-class person in Arkansas may not be a middle-class person in New York City, for example, where the cost of living is much higher. Generally, a three-person household should have an income between $51,967 and $155,902 to be considered middle class.

What Percentage of Americans Make Over $100k?

As of 2024, 37.8% of American households made over $100,000. This is slightly lower than in 2019 but higher than any point before 2019. In fact, before the financial crisis in 2008, it was 30.8%.

The Bottom Line

Though the United States is by far the wealthiest country in the world, income and wealth inequality exist throughout the nation, which can be evidenced in the difference in median income and poverty throughout the states as well as by gender and race across the board.

Correction—Sept. 27, 2024: This article has been corrected to state that Black women earned approximately $0.80 for every $1 earned by White men, according to a 2023 study by Payscale.

Reviewed by JeFreda R. Brown

Direxion Daily Energy Bull 2X ETF (ERX): An Overview

Direxion launched the bull and bear lines of the Daily Energy Shares 2X ETF in November 2008. The $253 million AUM Direxion Daily Energy Bull 2X (ERX) is a leveraged ETF that aims to reproduce 200% of the daily returns of the S&P Energy Select Sector Index (IXE). In other words, for every 1% gain in the underlying index, ERX attempts to produce a corresponding 2% gain.

Prior to March 31, 2020, ERX attempted to produce a corresponding 3x gain.

Key Takeaways

• For traders looking for exposure to the energy sector, the Direxion Daily Energy Bull 2x ETF (ERX) can provide 200% returns.
• Because it uses leverage, it is not intended for long-term holding, but rather a tool for short-term positioning.
• Prior to 2020, the ERX sought a 3x return. Today it is a 2x return ETF.

Direxion ETF Characteristics

ERX is an open-ended fund offered through the Direxion Funds family and advised by Rafferty Asset Management, LLC. Like most double-leveraged ETFs, ERX is actively managed and can come with high costs. Its expense ratio of 0.90% is higher than a typical standard ETF’s but relatively in line with the industry average for a leveraged and indexed ETF. Fund expense ratios do not include brokerage fees or other trading expenses.

To achieve its correct leverage, ERX also invests in financial instruments not found in the IXE portfolio. These instruments can include derivatives like futures contracts, forward contracts, options on securities, equity caps, floors and collars, swaps, short selling, reverse repurchases, and other ETFs.

Direxion is a renowned provider of leveraged and inversely leveraged ETFs, particularly in the double-leveraged space. Its expense limitation arrangement with Rafferty Asset Management extends to all of its fund offerings, which is particularly suitable for investors who prefer actively managed and high-turnover instruments.

ERX Fund Holdings

ERX is an energy ETF that is almost entirely invested in domestic companies in the energy sector. Approximately 91% of the fund is weighted toward Oil, Gas, and Consumable Fuels companies, while the remaining 9% is allocated toward Energy Equipment and Services. The fund’s top holdings include:

• Exxon (23.15%)
• Chevron Texaco (15.37%)
• Conocophillips (8.14%)
• Williams (4.60%)
• Eog Resources (4.53%)

Suitability and Recommendations

ERX allows investors to magnify potential short-term gains through its use of 2x leverage. As it seeks to reproduce daily performance, ERX is structured as a short-term fund and is not designed to track its underlying index for periods longer than one day.

All investments come with risk, but leveraged ETFs can be particularly risky. Any shareholder of ERX or its inverse, the Direxion Daily Energy Bear 2X Shares ETF (ERY), has exposure to a degree of market risk and volatility that greatly exceeds that of most equities. As such, these ETFs should only be considered by investors who understand leverage risk and know how to manage this risk in their portfolio.

Due to its heavy weighting in the energy sector, ERX’s performance is highly dependent on oil and gas prices. Investors should closely monitor the price of energy commodities and energy commodities futures.

What is a Leveraged ETF?

A leveraged ETF uses debt and financial derivates to achieve financial returns greater than an underlying index, fund, or currency. Most leveraged ETFs aim to achieve 2x or 3x daily returns compared to their underlying assets.

What is an Inverse ETF?

An inverse ETF is a fund that is designed to perform opposite to its underlying index. For example, if a particular index falls 10%, an inverse ETF that tracks the index should increase approximately 10%.

Who Should Invest in ERX?

As a leveraged energy ETF, ERX is not suitable for all investors. In general, only investors who understand leveraged funds and have a high appetite for risk should actively trade ERX and other leveraged ETFs. It’s not designed as a buy-and-hold fund, which means investors will have to actively monitor their position to know when to submit buy or sell orders.

The Bottom Line

In general, a 2X ETF is only meant for investors who have experience with leveraged instruments and are comfortable consistently monitoring their own portfolios. ERX is not a buy-and-hold play and is not suitable for fixed-income investors. It has a large bid/ask spread and does not have a consistent yield.

ERX has a track record of large upswings and downswings and is risky due to its leverage. Its beta is around 4.5, meaning that it is nearly 5x more volatile than the S&P 500 index. This could serve as a nice satellite holding for competent investors, but it should never make up the core of a balanced portfolio.

How we create unbiased, comprehensive reviews and ratings of auto lenders

Investopedia is dedicated to helping you find the right auto lender for your personal financial situation. Our full-time research and editorial teams conducted comprehensive research into the auto loan industry, focusing on 16 lenders. Each lender was evaluated on 63 criteria in five categories: cost of loans, loan terms, borrowing requirements, customer experience, and additional features.

Our editors and researchers independently evaluate all recommended products and services. If you click on the links we provide, we may receive compensation. Our advertising partnerships are not a factor in how we evaluate products, though they may affect the order of products you see listed in our articles.

How We Research Auto Lenders

We chose a selection of 16 banks and credit unions to review, based on the results of our research into the auto loan industry. That included an analysis of consumer interest and a competitive analysis. Lenders were evaluated based on whether they provide new, used, or refinance loans, and loan aggregators were omitted from the research process. The research and data collection process occurred from November 2024 into February 2025. 

Data Collection and Scoring

We developed a quantitative model to objectively score auto lenders in five key categories; 62 criteria were collected for each lender, and one criterion was calculated. 35 of those criteria were given weights to score and rank those lenders. Information was collected by Investopedia from company websites, media representatives, and customer support. Some of the research criteria were aggregated into combined factors (customer review rating, for example). The unweighted criteria were collected for background to help inform our reviews and recommendations.

Each company was scored using our “Investopedia’s Rating” scale of 0.00 to 5.00.

• All data points were scored on a 0.00 to 1.00 scale.
• Binary criteria were scored on a scale of 0 or 1.
• Continuous criteria were scored so that the minimum data value was re-scaled to 0.00 and the maximum value was re-scaled to 1.00.
• Aggregated criteria scores were calculated based on scores of individual criteria, and the results were re-scored on a continuous scale.
• Any data point that was not disclosed by a company was given a score of 0.

Auto Lender Evaluation Categories

Our evaluation categories were weighted as follows. These categories consist of 63 criteria for each of the 16 companies, resulting in 1,008 data points that make up our rubric.

Category	Weight	Number of Criteria
Cost of Loans	34.00%	12
Loan Terms	28.00%	13
Borrowing Requirements	22.00%	14
Customer Experience	10.00%	11
Additional Features	6.00%	13
Total	100.00%	63

The weights and resulting lender scores were used to determine our picks for the best auto loans.

Cost of Loans

We researched the costs of new, used, and refinance loans. This category consisted of the following criteria with the accompanying weights.

Criterion	Weight
Autopay Discount	2.00%
New Minimum Fixed APR	1.50%
New Maximum Fixed APR	6.50%
Used Minimum Fixed APR	2.00%
Used Maximum Fixed APR	8.00%
Refinance Minimum Fixed APR	2.00%
Refinance Maximum Fixed APR	8.00%
Maximum Origination Fee	2.00%
Maximum Late Payment Fee	2.00%
Total	34.00%

Autopay Discount

Autopay discounts usually provide a small percentage off the APR of a car loan, like 0.25% or 0.50%. We scored this on a continuous scale from 0 to 1, awarding more points to lenders with larger autopay discounts. This criterion was weighted at 2.00% of the overall score.

New Minimum Fixed APR

Rate shopping is an important part of buying or refinancing a car. We scored minimum fixed APRs on a continuous scale from 0 to 1, with lower minimum APRs getting the higher score. This criterion was weighted at 1.50% of the total score; minimum APRs were given lower weights than maximum APRs because fewer people would qualify for the best rates.

New Maximum Fixed APR

We scored maximum fixed APRs for new car loans on a continuous scale from 0 to 1, with higher APRs earning higher scores. Higher APRs earned higher scores because lenders with higher maximum APRs may be more willing to lend to people with less-than-great credit. This criterion was weighted at 6.50% of the total score.

Used Minimum Fixed APR

We treated used car loan APRs as more important than new car loan APRs because the used car market is generally larger and the majority of auto loans are used car loans. Minimum fixed APRs for used car loans were scored on a continuous scale, with lower APRs earning better scores. This factor was weighted at 2.00% of the overall score, because relatively few people with qualify for the best possible rate.

Used Maximum Fixed APR

Maximum fixed APRs for used car loans were scored on a continuous scale, with higher APRs earning better scores. This factor was weighted at 8.00% of the overall score, as it’s related to the ability of many people to obtain a loan.

Refinance Minimum Fixed APR

Minimum fixed APRs for refinance loans were scored on a continuous scale, with lower APRs earning higher scores. This criterion was weighted at 2.00% of the total score, because most people won’t qualify for the lowest rate.

Refinance Maximum Fixed APR

Maximum fixed APRs for refinance loans were scored on a continuous scale, with higher APRs earning better scores to reflect the increased accessibility of lenders with higher maximum APRs. This criterion was given a weight of 8.00% of the total score.

Maximum Origination Fee

Most lenders included in our research don’t charge an origination fee, but a few do. This criterion was scored on a binary scale; lenders that don’t charge an origination fee scored 1, and lenders that do charge such a fee scored 0. This criterion was weighted at 2.00% of the overall score.

Maximum Late Payment Fee

Most (but not all) auto lenders included in our research charge late fees, while some don’t disclose if they do or not. This criterion was scored on a binary scale, based on whether or not the lender discloses its late payment fee terms; lenders that do disclose their terms scored 1, and lenders that do not scored 0. This criterion accounted for 2.00% of the total score.

Loan Terms

Loan terms refers to how fast you get the loan, the loan amounts, the repayment terms (how long you have to repay the loan), and how much you can borrow. The following criteria were included in this category.

Criterion	Weight
Minimum Days to Receive Loan	2.00%
New Minimum Loan Amount	1.50%
New Maximum Loan Amount	2.50%
New Minimum Repayment Terms	0.50%
New Maximum Repayment Terms	1.50%
Used Minimum Loan Amount	2.50%
Used Maximum Loan Amount	3.50%
Used Minimum Repayment Terms	1.50%
Used Maximum Repayment Terms	2.50%
Refinance Minimum Loan Amount	2.50%
Refinance Maximum Loan Amount	3.50%
Refinance Minimum Repayment Terms	1.50%
Refinance Maximum Repayment Terms	2.50%
Total	28.00%

Minimum Days to Receive Loan

Car shopping can take some time, but sometimes you may need to get a loan quickly to close on a car deal. Some lenders can deliver the funds as soon as the same day. We scored this factor on a continuous criterion, giving higher scores to lenders with faster loan disbursal. This criterion was given a weight of 2.00% in the total score.

New Minimum Loan Amount

The amount you can borrow plays a role in the vehicle you can buy. Look for a lender that can accommodate your vehicle of choice so you can get the exact loan amount you need, whether you want to buy an expensive car or a cheap car. We scored minimum loan amounts for new car loans on a continuous scale, with lower loan amounts scoring higher because this indicates a wider range of possible loan amounts. This criterion amounted to 1.50% of the total score.

New Maximum Loan Amount

Maximum loan amounts for new car loans were scored on a continuous scale from 0 to 1, with higher loan amounts scoring higher because this indicates a wider range of possible loan amounts. This criterion was weighted at 2.50% of the total score.

New Minimum Repayment Terms

The time you have to repay a loan affects your monthly payment amount and the total amount you end up paying—longer terms mean a smaller monthly payment but a higher overall cost. It’s helpful when a lender offers a wide range of terms to suit your needs. We scored minimum repayment terms for new car loans on a continuous scale from 0 to 1, with lower minimum terms earning better scores. This criterion was given a weight of 0.50% in the overall score.

New Maximum Repayment Terms

We scored maximum repayment terms for new car loans on a continuous scale, giving better scores to lenders with higher maximum terms. This criterion was weighted at 1.50% of the total score.

Used Minimum Loan Amount

We scored minimum loan amounts for used car loans on a continuous scale from 0 to 1, with lower minimum amounts earning better scores. Used loan terms were weighted higher than new loan terms; this criterion was weighted at 2.50% of the overall score.

Used Maximum Loan Amount

Maximum loan amounts for used car loans were scored on a continuous scale, with higher maximum amounts earning better scores. This factor was given a weight of 3.50% in the overall score.

Used Minimum Repayment Terms

We scored minimum repayment terms for used car loans on a continuous scale, from 0 to 1. Lower minimum repayment terms were given higher scores, as they reflect a wider range of options. This criterion was given a weight of 1.50%.

Used Maximum Repayment Terms

Maximum repayment terms for used car loans were scored on a continuous scale, from 0 to 1. Longer repayment terms were given better scores. This criterion was given a weight of 2.50%.

Refinance Minimum Loan Amount

If you’ve been paying off a loan and federal rates drop, or your credit score improves, it might make sense to refinance. Getting a lower APR can save you hundreds of dollars over the course of a loan, but you need to find a lender that can match your remaining loan balance. If you have a low remaining balance, that may be hard to do. We scored this criterion on a continuous scale, from 0 to 1. Lenders with lower minimum amounts for refinance loans scored higher. This criterion was given a weight of 2.50%.

Refinance Maximum Loan Amount

It’s also important to find a lender that can match a high loan balance, if necessary. Maximum loan amounts for refinance loans were scored on a continuous scale, from 0 to 1; higher maximum loan amounts were given better scores. This criterion was given a weight of 3.50% in the total score.

Refinance Minimum Repayment Terms

Minimum repayment terms for refinance loans were scored on a continuous basis, from 0 to 1. Lower minimum term options were given higher scores. This criterion was weighted at 1.50% of the total score.

Refinance Maximum Repayment Terms

We scored maximum repayment terms on a continuous scale, with higher maximum terms getting higher scores to reflect the value of flexibility in repayment options. This criterion was weighted at 2.50% of the overall score.

Borrowing Requirements

Lenders set different borrowing requirements for their loans, although they don’t always disclose much of this information. When it comes to auto loans, you may need to meet certain credit and income requirements as the borrower, and the vehicle may need to meet certain requirements itself, like age and mileage. The following criteria were scored and weighted in our review of auto lenders.

Criterion	Weight
List of States Available	2.00%
Membership Requirement	8.00%
Joint Application/ Co-Borrowers/ Co-Signer	2.00%
Minimum Recommended Credit Score to Qualify	2.00%
Minimum Income Requirement	2.00%
Loan-to-Value Ratio	2.00%
Maximum Accepted Mileage	2.00%
Maximum Accepted Age	2.00%
Total	22.00%

List of States Available

Lenders that serve more people in more states end up with more experience, which may translate into a better service. Most lenders in our research are available nationwide. We scored state availability on a continuous scale, with more state availability earning a higher score. This factor accounted for 2.00% of the total score.

Membership Requirement

Banks don’t usually have special requirements to open an account, but credit unions typically do have membership requirements, like living in certain areas, working in certain jobs, or being a part of certain organizations. You can often join these organizations and gain membership eligibility at credit unions for $15 or less. You may have to open a savings account with a small amount of money if you want to take out a loan from a credit union, as well. This criterion was scored on a binary scale; lenders with no membership requirement were given a score of 1, and lenders with a requirement were given a score of 0. This criterion accounted for 8.00% of the total score.

Joint Application/ Co-Borrowers/ Co-Signer

It can be tough to find a loan if you don’t have the best credit. Applying with a co-borrower or co-signer who does have good credit can increase your odds of approval. There are some differences between co-borrowers and co-signers, but in each case they share liability for the debt. We scored this factor on a binary scale; lenders that allow you to apply with another person in any way earned 1 point, and lenders that do not earned 0 points. This criterion accounted for 2.00% of the total score.

Minimum Recommended Credit Score to Qualify

It can be helpful to know a lender’s borrower requirements when shopping for a loan, but most lenders don’t disclose these details publicly. Still, some do. We scored this criterion on a binary scale, based on whether or not lenders are transparent about this requirement: Lenders that reveal their minimum recommended credit requirement were given a score of 1, and lenders that do not received a 0. This criterion was given a weight of 2.00% in the overall score.

Minimum Income Requirement

Lenders occasionally reveal their minimum income requirements, although most do not. We scored this criterion based on whether or not lenders reveal this information. Lenders that are transparent with this requirement were given a score of 1, and lenders that are not were given a score of 0. This criterion was given a weight of 2.00% in the overall score.

Loan-to-Value Ratio

Loan-to-value (LTV) ratio refers to the amount of the loan compared to the value of the vehicle. A maximum LTV ratio of 120% means you can borrow up to 120% of the value of the vehicle. You may want to borrow more than the vehicle’s worth to help pay for the extra fees that can come with buying a car, but this can put you at risk of being upside-down on your loan. We scored this criterion on a binary scale; lenders that are transparent about their maximum LTV ratio scored 1, and lenders that aren’t scored 0. This criterion was given a weight of 2.00% of the overall score.

Maximum Accepted Mileage

If you want to buy a used car, you’ll have to find a lender that accommodates the vehicle’s age. Different lenders have different maximum accepted mileages; some are as low as 100,000, others are 150,000, and some lenders have no limit. This criterion was scored on a continuous scale; lenders with higher maximum mileage scored better. This criterion was given a weight of 2.00% in the total score.

Maximum Accepted Age

When shopping for a used car loan, the age limit is as important as the mileage limit. Some lenders have maximum age limits as low as 6 years, while others allow 10 or 20 years or have no limit. We scored maximum accepted age on a continuous scale, giving better scores to lenders with higher maximum ages. This criterion accounted for 2.00% of the full score.

Customer Experience

Investopedia researched the following criteria to understand the experience of the average borrower. Certain criteria, noted below, were combined into an overall customer satisfaction rating that took into account customer ratings and the number of ratings.

Criterion	Weight
Customer Service Availability	2.00%
App Store Rating	Included in Overall Customer Satisfaction Score
App Store Review Ct.	Included in Overall Customer Satisfaction Score
Google Play Rating	Included in Overall Customer Satisfaction Score
Google Play Review Ct.	Included in Overall Customer Satisfaction Score
Trustpilot Rating	Included in Overall Customer Satisfaction Score
Trustpilot Review Ct.	Included in Overall Customer Satisfaction Score
Overall Customer Satisfaction Score	8.00%
Total	10.00%

Customer Service Availability

You may not need to talk to someone when applying for an auto loan online, but in some cases you may have a question—and if something goes wrong, it’s important to speak to someone as soon as possible to ensure a smooth car buying process. We researched the number of hours per week that lenders are available for phone customer support. This criterion was scored on a continuous scale, from 0 to 1, with more phone availability earning higher scores. This criterion was given a weight of 2.00% in the overall score.

Overall Customer Satisfaction Score

Investopedia’s overall customer satisfaction score comes from combining data points from a number of sources. It looks at customer satisfaction ratings and the number of raters in each case, making accommodations for scores with different numbers of raters. The following criteria were aggregated into this overall customer satisfaction score:

• App Store Rating
• App Store Review Count
• Google Play Rating
• Google Play Review Count
• Trustpilot Rating
• Trustpilot Review Count

This overall satisfaction criterion was scored on a continuous scale, giving higher scores to lenders with higher customer satisfaction. This factor was given a weight of 8.00% in the overall score.

Additional Features

Auto lenders may provide a number of features with their loans, along with a car-buying service, specialty loan types, warranties, and more. The following additional features were weighted to score auto lenders.

Criterion	Weight
Car-Buying Service	2.00%
Cash-Out Refinancing	2.00%
Private-Party Vehicle Purchases	2.00%
Total	6.00%

Car-Buying Service

Some auto lenders offer car-buying services to help you find a vehicle, making the process simpler by wrapping up the shopping, buying, and financing in one package. We scored this criterion on a binary scale; lenders that offer a car-buying service got a score of 1, and lenders that don’t got a score of 0. This criterion was given a weight of 2.00%.

Cash-Out Refinancing

Cash-out refinancing allows you to borrow more money than your vehicle is worth, receiving the extra amount as cash. Most lenders in our research did not offer this option, but a handful did. We scored this criterion on a binary scale; lenders that offer cash-out refinancing scored 1, and lenders that don’t scored 0. This factor was given a weight of 2.00% in the overall score.

Private-Party Vehicle Purchases

When you get a new or used car loan, some lenders require you to buy a car from a dealership. But others don’t have that limitation—they allow you to buy cars from independent sellers as well, who are known as private parties. Around half of the lenders in our research allow you to buy vehicles from private parties. This was scored on a binary scale; lenders that allow private-party vehicle purchases were given a score of 1, and lenders that don’t were given a score of 0. This criterion was given a weight of 2.00% of the overall score.

Criteria Collected But Not Weighted

The following criteria were collected but not weighted. Some were collected for background or editorial purposes, to inform our company reviews. In other cases, criteria were not weighted because all of their data points across companies were identical.

Costs of Loan

• Minimum Origination Fee
• Minimum Late Payment Fee
• Prepayment Fee

Borrowing Requirements

• Loan Purpose (New, Used, Refinance)
• Type of Institution
• Online-Only Institution
• Minimum Credit History
• Maximum Debt-to-Income Ratio
• Bankruptcy Restrictions

Customer Experience

• Customer Service Methods

Additional Features

• Pre-Qualification Available
• Restrictions on Loan Use
• Better Rates With Partners
• Pays Your Creditor
• Discounts Available
• Auto Purchase/Refinance Rebate/Promotion
• Partner Dealerships
• Warranty Availability
• Lease Buyout Loan
• First-Time Car Buyer Program

Meet the Team

Fact checked by Ariel Courage
Reviewed by Margaret James

Tesla, Inc. (TSLA), formerly known as Tesla Motors, has grown since its IPO in 2010 into one of the world’s biggest producers of electric vehicles under the leadership of CEO Elon Musk. The company sells cars, SUVs, and trucks. In addition to electric vehicles, Tesla has expanded into energy generation and storage systems.

Tesla stock joined the S&P 500 and S&P 100 on December 21, 2020, and the company reached a $1 trillion market capitalization the following year. As of February 28, 2025, Tesla has a trailing twelve-month revenue of $97.69 billion and gross profits of $17.45 billion. The market capitalization is $906.90 billion. Below, we’ll take a look at the top shareholders of Tesla based on the number of shares owned as of February 28, 2025.

Key Takeaways

• Tesla is the world’s most valuable auto manufacturer, with a market capitalization of $906.90 billion as of February 28, 2025.
• CEO Elon Musk is the largest shareholder, with 12.8% of the company’s equity as of February 28, 2025.
• Besides Musk, the largest shareholders are asset management companies like Vanguard, BlackRock, and State Street.

Elon Musk

Tesla CEO Elon Musk is the largest shareholder in Tesla. With over 410 million shares, Musk holds 12.8% of all Tesla shares. In addition to serving as co-founder and CEO of Tesla beginning in 2003, Elon Musk also is CEO of SpaceX, Neuralink, and The Boring Company. He was also co-founder of PayPal Holdings, Inc. (PYPL). According to Forbes, as of February 28, 2025, Musk is the richest person in the world, with a net worth of about $355.8 billion.

Vanguard Group

Vanguard Group holds over 243 million shares of Tesla stock as of December 31, 2024, with a value of $69 billion. This accounts for about 7.56% of all outstanding shares. As one of the world’s largest asset managers, most of these shares are held on behalf of clients, who invest in Vanguard’s various mutual funds and exchange-traded funds.

The largest share of these are held in the Vanguard Total Stock Market Index Fund, which represents a cross-section of the market as a whole. Vanguard has more than $9.1 trillion in assets under management.

BlackRock Inc.

BlackRock, the world’s largest asset manager, holds about 202 million shares of Tesla stock as of December 31, 2024. BlackRock’s portfolio accounts for 6.29% of all Tesla shares. Like Vanguard, Blackrock does not directly own these shares—they are held on behalf of thousands of customers who invest in BlackRock’s ETFs and mutual funds. As of the first quarter of 2024, BlackRock’s portfolios hold a combined $10.5 trillion in assets under management.

State Street Corporation

State Street holds the third-largest institutional share of Tesla stock. As of December 31, 2024, State Street held about 112 million shares of Tesla, accounting for 3.49% of the total. As of the fourth quarter of 2024, State Street holds $4.7 trillion in assets under management.

How Much Is Elon Musk Worth?

Elon Musk has a net worth of $354.3 billion as of February 28, 2025, making him the richest person in the world.

How Much Is Tesla Worth?

Tesla closed at $281.95 per share on February 27, 2025, giving the stock a market capitalization (intraday) of $929.478 billion.

How Much of Tesla Is Held by Institutional Investors?

Institutional investors hold a substantial portion of Tesla shares, totaling about 66.20% of total shares outstanding.

How Much Tesla Stock Does Kimbal Musk Own?

Kimbal Musk, the younger brother of Elon Musk, owns a total of 1.46 million Tesla shares, accounting for less than 1% of the total. Musk holds a seat on Tesla’s Board of Directors. He also served on the board of SpaceX, the aerospace manufacturer and space exploration company whose CEO and founder is Elon Musk.

How Much Is SpaceX Worth?

Because SpaceX is not traded on public markets, it is difficult to assign a value to the company. A private sale in December 2023 valued the company at $175 billion, making it the most valuable pre-IPO company in history.

The Bottom Line

Tesla is a leading auto manufacturer and one of the most valuable companies in the world. As of 2024, the largest shareholder is CEO Elon Musk, who holds 12.8% of Tesla equity. Besides Musk, the largest shareholders are asset managers, like BlackRock and Vanguard.

Reviewed by Colleen Ramos

Investment bankers are educated and experienced professionals who facilitate significant and complex financial transactions for businesses and governments. This profession offers high salaries and great perks, making careers in the field very attractive to recent college graduates and experienced finance professionals. Not surprisingly, the investment banking job market is among the most competitive.

Here are the qualities many investment banks look for in job candidates.

Key Takeaways

• New opportunities come from all directions, so investment bankers need to be creative and nimble thinkers.
• Selling is a big part of the job and applicants must be skilled at creating and presenting proposals and closing deals.
• Leadership potential is key, as even junior employees will own their own projects.

Intellectual Abilities

“How many jellybeans can fit in the Empire State Building?” is an odd job interview question, but the answer can convey something about the candidate’s thinking. The interviewer is trying to assess the candidate’s intellectual ability by asking a question out of left field, and there’s a reason for that.

Imagine being an investment banker and meeting a business tycoon. The tycoon starts musing about the potential for selling tractors in India, a country he knows little about. A good investment banker should be prepared to quickly assess the industry, the market, and the business idea, beginning with an estimate of the number of farmers and the amount of farmland in India and an educated guess at the potential market for tractors there.

New business ideas, deals, products, and opportunities come from all directions in investment banking. Candidates should be adept at identifying and exploring them. That takes a nimble intellect.

Analytical Skills

Investment bankers are often required to present detailed analyses of business ventures and investment plans to highly demanding clients. Analytical expertise, in addition to good number crunching and quantitative abilities, are required to present the business plans and the risk-return tradeoffs, and to back it up with facts and figures when challenged.

Important

Financial modeling, corporate finance principles, accounting and reporting, economic forecasting and market analysis, and risk management are must-have skills for investment bankers.

Communication Skills

The primary job skill of investment banking is persuading and convincing. Selling an idea takes excellent all-around communication and presentation skills. These include making advanced spreadsheets, documents, and slideshows.

Management and Leadership Abilities

Investment bankers often start as junior analysts, and candidates are assessed on their long-term potential. In the short- to mid-term, they are assigned complete ownership of a business opportunity, eventually followed by the assignment of an entire region or business segment. Down the line, they may become vice presidents and above, leading business divisions.

Even in an entry-level position, candidates are required to take responsibility, build teams, seek assistance from across multiple internal divisions, and build partnerships with external vendors and partners.

Management and leadership potential is an integral part of the investment banking job.

Entrepreneurial Skills

Investment banking is a key player in merger and acquisition deals, corporate restructuring plans, initial public offerings, and new business capitalization.

The ability to identify business opportunities in new and unusual areas is a requirement of the job. It may involve funding a team of enthusiasts to help build a business from scratch, or spotting growth potential in an existing business.

Networking Skills

Investment bankers need the ability to make connections with people from many industries and various cultures. Candidates should demonstrate the ability to deal with unfamiliar situations and maintain healthy client relationships.

Other Requirements

Investment banks say they look for loyalty, authority, diplomacy, creativity, and high ethical standards. Common interview questions include, “Give me an example of an occasion when you demonstrated loyalty [or authority, diplomacy, or creativity]?” Another common opener is: “Give me an example of when you faced an ethical dilemma, and how did you solve it?”

Fluency in another language is a bonus, and almost any other modern language could come in handy.

What Skills Are Most Important in Investment Banking?

Investment bankers need a thorough understanding of financial markets, corporate finance, communication, and analytical skills.

Do Investment Bankers Need People Skills?

People skills are essential for investment bankers because they interact with people daily and manage and lead others.

What Skills Do You Need for JP Morgan?

JP Morgan looks for highly motivated “leaders with highly developed critical thinking, problem solving, and analytical skills,” as well as communication skills and solid financial analysis acumen.

The Bottom Line

Investment banking can be a lucrative career, but it requires a wide range of skill sets, thought diversity, analytical skills, financial knowledge, and experience to be successful.