2 Vanguard ETFs I’ll Keep Forever

Investing in exchange traded funds can be a relatively easy way to generate wealth. ETFs are inexpensive, low-maintenance investments that also offer the benefit of immediate diversification, as each fund can hold hundreds or thousands of stocks.

However, not all ETFs are created equal and some are better investments than others. While the funds you choose will depend on your preferences and investing style, there are two Vanguard ETFs that I plan to keep in my portfolio forever.

1. Vanguard S&P 500 ETF (VOO)

the Vanguard S&P 500 ETF (NYSEMKT: FLIGHT) includes 507 shares of 500 of the largest US corporations. The fund’s largest holdings are primarily technology stocks, including Apple, Microsoft, and Amazon – but it also includes companies from a wide variety of industries.

I chose this fund because it is a relatively safe investment and is likely to generate consistent growth over time, regardless of market trends.

The S&P 500 Index itself has seen countless drops, fixes, and crashes since its inception in 1959. However, it has still managed to achieve an average rate of return of around 10% per annum over time. . In other words, while the market has had its good and bad years, those ups and downs have historically averaged around 10% per year.

Since this ETF tracks the S&P 500, there is a good chance that it will also generate positive returns, on average, over the long term, even if the market experiences several crashes during this time.

These 10% average returns can also add up significantly over time. If, for example, I invest $ 400 per month in this ETF while earning an average annual return of 10%, I would have around $ 790,000 accumulated after 30 years.

2. Vanguard Growth ETF (VUG)

the Vanguard Growth ETF (NYSEMKT: VUG) includes 288 stocks of companies that have the potential to grow faster than average. This ETF has a strong focus on the tech sector, with tech companies making up around half of the fund. It does, however, include stocks from several other industries.

This ETF is slightly higher risk than the S&P 500 ETF for several reasons. On the one hand, it includes about half the number of stocks, which offers less diversification. Additionally, growth stocks can be riskier than stocks of more established companies because they tend to be more volatile.

That said, the main holdings of this fund are big tech companies like Amazon, Apple, Microsoft and Alphabet – companies which are growing rapidly, but which are also huge and relatively stable companies.

The advantage of investing in a growth ETF is that you are likely to get above average returns. In fact, since its creation in 2004, this fund has posted an average rate of return of nearly 12% per year. If I were to invest $ 400 per month in this ETF while still getting an average annual return of 12%, I would have around $ 1.158 million after 30 years.

Getting the most out of your investments

No matter where you choose to invest, you can maximize your income by investing consistently for as long as possible. Both of these ETFs make great long-term investments. By investing now and holding them for decades, you could earn more than you think.