So you've got $1,000 burning a hole in your pocket, and you're looking to invest it for long-term growth. (Maybe you've actually got $100,000 to invest, or just $100 -- the following advice is one-size-fits-all.)
Here are a handful of solid exchange-traded funds (ETFs) -- funds that trade like stocks -- to consider right now. See which ones seem best for you.
Image source: Getty Images.
Before offering a little detail on each, here's an overview of their performance. Note that being Vanguard funds, each has a very low expense ratio (annual fee). For context, know that an expense ratio of 0.10% means that on a $1,000 investment, you'll pay $1 per year.
ETF
Expense ratio
5-Year Avg. Annual Return
10-Year Avg. Annual Return
Vanguard S&P 500 ETF(NYSEMKT: VOO)
0.03%
14.76%
13.10%
Vanguard Total Stock Market ETF(NYSEMKT: VTI)
0.03%
14.07%
12.56%
Vanguard Total World Stock ETF(NYSEMKT: VT)
0.07%
10.16%
9.35%
Vanguard Dividend Appreciation ETF (NYSEMKT: VIG)
0.06%
11.63%
11.40%
Vanguard S&P 500 Growth ETF(NYSEMKT: VOOG)
0.10%
17.37%
15.19%
Vanguard Growth ETF(NYSEMKT: VUG)
0.04%
18.89%
15.88%
Vanguard Information Technology ETF (VGT) (NYSEMKT: VGT)
0.10%
22.02%
20.87%
Data source: Morningstar.com, as of Dec. 23, 2024.
1. The Vanguard S&P 500 ETF
The Vanguard S&P 500 ETF is a classic, simple S&P 500 index fund, tracking the 500 large American companies in the S&P 500 index. This fund, or any other low-fee S&P 500 index fund, can be all you need if you want to invest in stocks for the long run. Together, its holdings represent around 80% of the entire U.S. stock market's value. Investing in this fund is like betting on the future of the American economy.
Note that this ETF, and most of the ones that follow, encompasses all of the "Magnificent Seven" stocks, which are Apple, Amazon.com, Google parent Alphabet, Facebook parent Meta Platforms, Microsoft, Nvidia, and Tesla.
2. The Vanguard Total Stock Market ETF
If you'd rather invest in more of the U.S. economy -- in fact, in just about all of it -- consider the Vanguard Total Stock Market ETF. Unlike S&P 500 index funds, this one spreads your money across more than 3,500 stocks, not just 500, and it includes lots of small companies, too.
3. The Vanguard Total World Stock ETF
What? You want to invest in even more than the entire U.S. stock market? Then consider the Vanguard Total World Stock ETF, which aims to deliver just about all of the world's stock markets -- more than 9,700 stocks -- all in one easy, low-fee investment.
4. The Vanguard Dividend Appreciation ETF
If you're looking to fill your portfolio with lots of dividend payers, who could blame you? Consider this: a study by Hartford Funds and Ned Davis Research found that between 1973 and 2023, companies that grew or initiated dividend payments delivered annualized returns of 10.2% while dividend non-payers delivered a 4.3% annualized return and an equal-weight S&P 500 fund returned 7.7% annually.
Oh, and the dividend payers were less volatile than their counterparts, too. The Vanguard Dividend Appreciation ETF is a terrific way to load up on companies that not only pay dividends, but also tend to increase them frequently.
5. The Vanguard S&P 500 Growth ETF
Maybe you're interested in growing your dollars more quickly than with just a basic S&P 500 index fund. If so, consider this fund, the Vanguard S&P 500 Growth ETF, and the next two. (Scroll up to see their impressive performances in recent years, and how they compare to the other funds.)
This ETF starts with the 500 companies in the S&P 500 and only invests in roughly the faster-growing half of them. It recently held shares of 234 different companies. Note that about a third of its value was recently in only its top three holdings -- Apple, Nvidia, and Microsoft -- which explains much of its great recent performance.
6. The Vanguard Growth ETF
The Vanguard Growth ETF recently held about 180 different stocks. It tracks the CRSP U.S. Large Cap Growth Index and is focused on companies growing at a faster-than-average clip. This fund, too, has about a third of its value recently in Apple, Nvidia, and Microsoft.
7. The Vanguard Information Technology ETF
Yup, you guessed it. The Vanguard Information Technology ETF, full of tech stocks, also has much of its value -- recently accounting for almost 45%! -- in Apple, Nvidia, and Microsoft. If you're thinking about investing in this fund or the last two, be sure you're bullish on these companies. Yes, this ETF recently held 316 stocks, but close to half its value was in just three.
So consider parking some or most of your long-term dollars in one or more of these ETFs -- and know that there are other solid Vanguard ETFs out there, too -- and other fast-growing ETFs.
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