Vanguard became known as the king of index funds, and they have also created many great ETFs to go along with their line of index funds.
Being able to pick a suitable investment can be a tremendous task, especially with so many stocks and funds to choose from. ETFs make this process much easier, especially when you can pick one or two funds and hold them forever.
An exchange-traded fund (ETF) can be a great vehicle to create wealth. They are like mutual funds in holding many different assets, but they are sold like stock on the open market. There are many to choose from, but if you have an account with Vanguard, then you have some great low-cost options at your disposal.
Here are two Vanguard ETFs to buy and hold forever.
Vanguard Total Market Index Fund ETF (VTI)
One way to capture the market in your portfolio is by holding one of the best ETFs on the market, and that is VTI. It will allow you to have a piece of everything on the market. The best part is that it is done at a low cost of 0.03% Expense Ratio. That means it costs you $3 for every $10,000 invested.
With VTI, you are able to buy and hold this asset forever. As companies move throughout the years, some will move to the top 10 of the market while others will falter away. As this happens, the fund will continue to keep going forward as the market changes. The fund will be aligned with the market.
The diversification allows you to have some peace of mind by having the ability to hold small-caps, mid-caps, and large-cap funds all in one ETF. VTI is similar to VOO in that they both contain the top 500 companies on the market in the fund, but you can get a bit more diversification with VTI.
Vanguard Information Technology ETF (VGT)
Many people will want a growth ETF as a part of their portfolio. If you already hold VTI and you want a more significant concentration in sectors, why not go with a technology ETF like VGT? VGT and QQQ ( a widespread growth ETF) are a bit different as VGT holds mostly technology companies that do not include Tesla or Amazon. Still, it does have a large concentration in companies like Microsoft, Apple, and Nvidia.
As technology continues to advance, these tech companies will have a bit more of a rise than some of the other companies that you can look towards. VGT over the last ten years has averaged a little over 18% per year. That is great news if you are young and looking for great returns. There is not much of a dividend attached to VGT, but the capital growth of the fund will help increase your wealth.
With more risk comes a potential downturn in stock price. That just means there will be opportunities to load up when the market is down.
Those are two great Vanguard ETFs that you could buy and hold forever. As the market continues to go up and down, VTI will allow you to have some stability, as VGT can help you have a little bit more risk and reward added to your portfolio.
I’m Steve. I’m an English Teacher, traveler, and an avid outdoorsman. If you’d like to comment, ask a question, or simply say hi, leave me a message here, on Twitter (@thefrugalexpat1). Many of my posts have been written to help those in their journey to financial independence. I am on my journey, and as I learn more I hope to share more. And as always, thanks for reading The Frugal Expat.