The S&P 500 and Nasdaq-100 indices are still significantly below their recent highs but are now firmly out of bear market territory. As of this writing, the S&P 500 is about 10% below its 2025 peak, while the Nasdaq is still about 13% lower.

However, there are some index funds, as well as some actively managed ETFs that are still in bear markets, defined as 20% or more below their highs. I've been buying shares of three recently, and here's what they are.

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The small-cap slump continues

At the start of 2025, small cap stocks were trading for their lowest price-to-book valuations relative to their large-cap counterparts in more than 25 years. And since the start of 2025, the gap has widened even further. There are a few reasons, such as the persistent high-interest environment that favors larger companies, especially the big-cap tech stocks.

To be sure, large caps should trade at somewhat of a premium, at least on a price-to-book basis. After all, the largest components of the S&P 500 are largely asset-light technology companies. But you might be surprised to learn that the average stock in the Russell 2000 small cap index has a P/B multiple of 1.8, compared with 4.6 for the typical S&P 500 stock.

The Vanguard Russell 2000 ETF(NASDAQ: VTWO) is my preferred way to invest, as it has a rock-bottom 0.07% expense ratio. It invests in all 2,000 small caps that make up the popular index, and unlike the S&P 500, it isn't top-heavy, with no stock making up more than 0.65% of the index.

We could be near a real estate inflection point

The Vanguard Real Estate ETF(NYSEMKT: VNQ) is 25% below its all-time high, as the 2022-2023 rising-rate environment sent real estate investment trusts, or REITs, into a technical bear market, where they remain today.

Elevated interest rates are harmful to REITs, or at least their stock prices, for a few reasons. First, income-focused investments tend to fall out of favor when risk-free returns from instruments like Treasury bonds become more attractive. Second, most real estate investment trusts rely on borrowed money for growth, and rising rates makes the cost of capital higher. Finally, and most importantly, commercial property values tend to fall when interest rates rise, and recent data suggests that has definitely been the case in most commercial real estate subsectors.

However, REITs also have a strong history of outperformance in falling-rate environments. With a median expectation of four 25-basis-point Federal Reserve rate cuts by the end of the year, we could be getting close to an inflection point for the real estate sector. Plus, it's worth noting that this is a relatively high-paying ETF with a 4.2% yield, so it can produce a reliable income stream in your portfolio.

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An actively managed tech ETF

Unlike the previous two ETFs, the Ark Autonomous Technology & Robotics ETF (NYSEMKT: ARKQ) isn't an index fund but is an actively managed ETF run by notable portfolio manager Cathie Wood. In a nutshell, I think the AI revolution is a tremendous investment opportunity, but I also think there's room for many winners.

One thing that stands out about this Ark ETF versus all of the AI index funds in the market is that you won't find the same-old big tech stocks at the top of the list. It does own Nvidia (NASDAQ: NVDA), but that's the 18th largest out of 36 holdings. Top holdings include Tesla(NASDAQ: TSLA), Kratos Defense & Security(NASDAQ: KTOS), Teradyne(NASDAQ: TER), and Palantir(NASDAQ: PLTR). Sure, Tesla is a household name, but most of the rest of the major holdings aren't.

With share of the ETF about 18% below their 2025 peak and 30% below their all-time high, it could be a great opportunity for investors who want a portfolio of outside-the-box AI opportunities without having to do the homework on each one.

All three of these could be excellent ETFs for long-term investors. However, it's important to realize that just because the stock market has rebounded a bit recently doesn't necessarily mean that the volatility is done. So keep in mind that all three could still be quite turbulent in the coming weeks and months.

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Matt Frankel has positions in Ark ETF Trust-Ark Autonomous Technology & Robotics ETF, Vanguard Real Estate ETF, and Vanguard Russell 2000 ETF. The Motley Fool has positions in and recommends Nvidia, Palantir Technologies, Tesla, and Vanguard Real Estate ETF. The Motley Fool recommends Teradyne. The Motley Fool has a disclosure policy.

3 Beaten-Down ETFs I'm Buying Hand Over Fist Now was originally published by The Motley Fool

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