Investing in ETFs: Top Picks for Your $1,000 Now

The stock market is currently experiencing volatility, though it’s less chaotic than earlier this year. Both major market indexes remain significantly lower than their recent peaks.

In this climate, investing in high-quality exchange-traded funds (ETFs) that track indexes presents a solid opportunity. ETFs are collections of assets traded as single units, providing diversification and flexibility that appeals to both new and experienced investors.

Where to invest $1,000 right now? Our analyst team has identified the 10 best stocks to buy currently. Learn More »

Starting with $500 can be effective, but consistency is critical. A strategy called dollar-cost averaging involves investing a fixed amount regularly, whether with each paycheck or on a set day monthly. Maintaining this approach is essential regardless of market conditions. In downturns, it allows you to purchase stocks at lower prices, improving your cost basis.

Even in a bull market, this strategy proves effective, as historical data shows. According to a study by JPMorgan Chase, since 1950, the S&P 500 has reached new all-time highs on 7% of trading days. Notably, on one-third of those days, the index did not drop afterwards.

Let’s explore three strong index ETFs for immediate investment.

The Vanguard S&P 500 ETF

The Vanguard S&P 500 ETF (NYSEMKT: VOO) is one of the world’s most popular ETFs. This fund tracks approximately 500 of the largest companies on U.S. stock exchanges and is market-cap weighted, meaning larger companies comprise a greater portion of the fund.

As with most Vanguard ETFs, it features a very low expense ratio. Even a seemingly small rate like 1% can diminish returns over time, especially as your investment grows. This ETF boasts an expense ratio of just 0.03%.

With the Vanguard ETF, investors gain access to a portfolio filled with some of the world’s largest enterprises, and it is generally viewed as a benchmark for the broader U.S. stock market.

Historically, this ETF has delivered robust returns, averaging 12.3% annually over the past decade, as of April’s end.

The Vanguard Growth ETF

The Vanguard Growth ETF (NYSEMKT: VUG) is another excellent option from Vanguard. This fund mirrors the CRSP US Large Cap Growth Index, closely aligned with the growth segment of the S&P 500, while also maintaining a low expense ratio of 0.04%.

This ETF provides a diverse portfolio of large-cap growth stocks that have propelled market gains in recent years. It is particularly concentrated in the tech sector, which comprises about 57% of its holdings. Major tech companies like Amazon and Tesla also feature, albeit categorized in other sectors.

If you seek exposure to the “Magnificent Seven” stocks (comprised of Apple, Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Tesla), this ETF is a fitting choice. As of last quarter’s end, these seven stocks represented over 50% of its holdings.

This fund has also performed strongly, showing a return of 14.5% over the past 10 years, as of the end of April.

Image source: Getty Images

The Invesco QQQ ETF

The Invesco QQQ ETF (NASDAQ: QQQ) is a standout that has consistently outperformed the S&P 500. This ETF tracks the Nasdaq 100, comprising the 100 largest non-financial stocks on that exchange, and is also market-cap weighted.

Historically, this index has attracted fast-growing firms, particularly in technology. Like the Vanguard Growth ETF, it is approximately 57% weighted toward tech.

The Invesco ETF has emerged as the best performer among the three discussed here, achieving nearly 17% average annual returns over the last decade, as of the end of April. It outperforms the S&P 500 more than 87% of the time when assessed on a rolling 12-month basis over the last decade (data ending March).

While its expense ratio is higher at 0.2%, the ETF’s consistent strong performance justifies this cost.

Should You Invest $1,000 in Vanguard S&P 500 ETF Right Now?

Before committing to the Vanguard S&P 500 ETF, consider this:

The analyst team has identified the 10 best stocks for investors currently, and the Vanguard S&P 500 ETF is not among them. The stocks that made this latest list are positioned for strong potential returns in the coming years.

For example, if Netflix was purchased following its inclusion on December 17, 2004, a $1,000 investment would be worth around $617,181!* Similarly, Nvidia, added to the list on April 15, 2005, would have turned a $1,000 investment into about $719,371!*

It is important to acknowledge that Stock Advisor has delivered a total average return of 909%—significant outperformance when compared to 163% for the S&P 500. Keep an eye on the latest top 10 list when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 5, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokesperson for Facebook, and sister to Meta Platforms CEO Mark Zuckerberg, also serves on The Motley Fool’s board. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. JPMorgan Chase is a promotional partner of Motley Fool Money. Geoffrey Seiler holds positions in Alphabet, Invesco QQQ Trust, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, JPMorgan Chase, Meta Platforms, Microsoft, Nvidia, Tesla, Vanguard Index Funds – Vanguard Growth ETF, and Vanguard S&P 500 ETF. The Motley Fool 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 those of the author and do not necessarily reflect those of Nasdaq, Inc.