Maximizing Investment Potential: Focus on These Vanguard ETFs
When many people think about investing in stocks, they envision researching different companies individually before deciding which ones to buy. While this method can help build wealth, there are simpler, more efficient ways to enhance your investment portfolio. One such method involves investing in a well-crafted exchange-traded fund (ETF), which allows you to invest in a variety of leading companies simultaneously.
As we kick off a new investing year, now is a prime time to evaluate two specific themes that could benefit your portfolio both in the current bull market and in the long term. The following Vanguard ETFs are ideal options that you can start buying today with just over $500 and hold for the long haul.
Where to invest $1,000 right now? Our analyst team has identified the 10 best stocks to consider immediately. See the 10 stocks »
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1. Vanguard S&P 500 Growth ETF
The Vanguard S&P 500 Growth ETF (NYSEMKT: VOOG) offers access to over 200 large-cap growth stocks. This investment is likely to enhance your portfolio during periods of market growth. It focuses on well-established companies with strong performance histories, providing stability even in challenging times.
The fund tracks the S&P 500 Growth Index, primarily investing in technology stocks, which currently make up 39% of its holdings. Some of the most significant stocks in this category include Nvidia, Apple, and Microsoft, each contributing between 6% and 12% to the fund’s weight.
While tech is a current focal point, this ETF covers 11 industries, offering instant diversification. Communication services and consumer discretionary follow as the second and third largest sectors, comprising 14% and 13% of the ETF, respectively. Notably, the composition of this fund may shift over time to reflect the top growth opportunities, making it a strong choice with a remarkable gain of over 110% in the past five years.
2. Vanguard Dividend Appreciation ETF
The Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) tracks the S&P U.S. Dividend Growers index, focusing on stocks known for consistent dividend growth. With investments in over 300 solid large-cap stocks, this ETF also emphasizes generating passive income. During robust market conditions, dividends add to your profits, while in downturns, they can mitigate losses, providing reliable income regardless of market fluctuations.
This ETF allocates 25% to technology stocks, with financials and healthcare sectors close behind at 21% and 14%, respectively. Among the top holdings are Broadcom, JPMorgan Chase, and UnitedHealth Group.
Investing in stocks that consistently increase dividends is vital. Companies that reward shareholders through steady dividend payments often have the financial resources to maintain this practice, suggesting stability. Although this Vanguard fund has grown 55% over five years—less than the growth ETF—it offers dependable performance, making it a suitable long-term investment.
Understanding ETFs for Effortless Investing
Buying ETFs is straightforward, just like purchasing stocks, as they trade during daily trading sessions. You don’t need specialized knowledge to invest in them. However, it’s crucial to keep an eye on fees, indicated by the expense ratio, to ensure they don’t diminish your returns over time. Both the Vanguard Growth and Vanguard Dividend Appreciation ETFs have low expense ratios of 0.1% and 0.06%, respectively.
These factors make both ETFs excellent “no effort” options for your investment portfolio now and in the future.
A Second Chance at a Profitable Opportunity
Have you ever felt like you missed out on investing in great stocks? If so, now might be the perfect time to reconsider.
Our expert team occasionally issues a “Double Down” stock recommendation for companies they believe are poised for significant growth. If you think you’ve already missed your chance, now is the time to act. The potential gains are impressive:
- Nvidia: If you invested $1,000 when we doubled down in 2009, you’d have $369,816!*
- Apple: If you invested $1,000 when we doubled down in 2008, you’d have $42,191!*
- Netflix: If you invested $1,000 when we doubled down in 2004, you’d have $527,206!*
Currently, we’re issuing “Double Down” alerts for three outstanding companies, and this might be an opportunity that doesn’t come around again soon.
Learn more »
*Stock Advisor returns as of January 21, 2025
JPMorgan Chase is an advertising partner of Motley Fool Money. Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, JPMorgan Chase, Microsoft, Nvidia, and Vanguard Dividend Appreciation ETF. The Motley Fool recommends Broadcom and UnitedHealth Group and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
