Investing in exchange-traded funds (ETFs) is a smart way to build a diversified portfolio. Vanguard offers some of the best ETFs, known for low fees and solid performance. Starting with $500, investors can buy and hold these ETFs for years, adding more over time to maximize returns.
Here are four Vanguard ETFs worth considering for long-term investment:
1. Vanguard S&P 500 ETF (VOO)
This is the largest ETF globally and tracks the S&P 500 index, which includes about 500 of the biggest U.S. companies by market value. The index is weighted by company size, meaning bigger companies have more influence.
The S&P 500 is often seen as a benchmark for the U.S. stock market. Over the past decade, VOO has delivered an average annual return of 12.3%, making it a strong core holding.
2. Vanguard Mega Cap Growth ETF (MGK)
MGK focuses on about 70 large, fast-growing U.S. companies, mainly in technology and consumer discretionary sectors. Its top five holdings—Apple, Microsoft, Nvidia, Amazon, and Meta Platforms—make up nearly half the fund.
This ETF has outperformed VOO, with an average annual return of 15.3% over the last 10 years. It offers potential for higher returns with moderate additional risk.
3. Vanguard Information Technology ETF (VGT)
VGT is Vanguard’s top performer in the past decade, with an average annual return of 18.9%. It invests heavily in large tech companies like Apple, Microsoft, and Nvidia, which together represent over 45% of the portfolio. While it carries more risk due to its sector concentration, it benefits from the ongoing growth in technology and artificial intelligence.
4. Vanguard Dividend Appreciation ETF (VIG)
For investors seeking less exposure to tech and more stability, VIG is a good choice. It tracks companies with a strong history of increasing dividends annually for at least 10 years.
The fund balances growth and value stocks across sectors like technology, financials, and healthcare. It has delivered an average annual return of 11.2% over the past decade, offering a blend of income and growth with lower risk.
Investment Strategy
Starting with $500 in any of these ETFs is a solid move. Investors should continue to invest regularly using dollar-cost averaging to reduce risk and build wealth over time.
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