Core Insights - The article emphasizes the effectiveness of low-cost exchange-traded funds (ETFs) for long-term wealth creation through broad diversification and compounding returns over time [1][12] Vanguard's Position - Vanguard is recognized as a pioneer in index fund investing and maintains a cost leadership position in ETF management, benefiting from scale advantages and a unique ownership structure that incentivizes minimizing expenses [2] Vanguard S&P 500 ETF (VOO) - The Vanguard S&P 500 ETF tracks the S&P 500 index, providing exposure to approximately 500 large U.S. companies with a low expense ratio of 0.03%, resulting in minimal annual fees for investors [3][5] - The fund has delivered average annual returns of about 14.5% over the past decade, making it a recommended core holding for long-term portfolios [3][5] Vanguard Growth ETF (VUG) - The Vanguard Growth ETF focuses on large-cap growth companies, charging an annual expense of 0.04% and yielding approximately 0.4% in dividends, with average annual returns of around 17.4% over the past 10 years [6][8] - This fund is suitable for investors comfortable with growth stock volatility, primarily investing in technology and consumer discretionary sectors [8] Vanguard Information Technology ETF (VGT) - The Vanguard Information Technology ETF provides concentrated exposure to U.S. technology companies, charging an annual fee of 0.09% and yielding roughly 0.4%, with average annual returns of approximately 23% over the past decade [9][11] - The fund's focus on technology creates both opportunities and risks, as it can significantly outperform during tech market rallies but may also amplify losses during corrections [11] Portfolio Construction - Combining these three Vanguard funds allows for diversified exposure to different market segments while maintaining low costs, with the S&P 500 fund offering broad market participation, the growth fund focusing on reinvestment, and the technology fund providing sector-specific access [12][13]
3 Vanguard ETFs Every Investor Should Consider
The Motley Foolยท2025-11-21 09:30