2 Unstoppable Vanguard ETFs to Buy for $500 and Hold Forever

Exchange traded funds (ETFs) can be a fantastic way to invest. However, with thousands of ETFs to choose from, it can be difficult to narrow down which one might be the right choice.

In this article, I will cover two very different but excellent ETFs. Let’s get started.

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Vanguard Growth ETF

The first unstoppable Vanguard ETF I want to cover is Vanguard Growth ETF (VUG 0.01%).

I’ve always leaned towards growth stocks over value stocks, so it’s no surprise that I like this fund.

In short, it focuses on the fastest growing stocks in the US stock market. It should come as no surprise that many of the top holdings are the big names you might expect: Apple, Microsoft, Nvidia, Amazon, Meta platform.

However, this fund is more than just a big tech fund. You will find it too Costco, Eli Lilly and Mastercard.

What you won’t find much of are dividend payments. Because the ETF is heavily weighted toward growth stocks, many of its underlying holdings pay little or nothing in dividends. Therefore, the fund has a low dividend yield of 0.5% at the time of writing.

But it has an excellent track record of performance. Over the past five years, the Vanguard Growth ETF has generated a total return of nearly 137% — meaning a $10,000 investment made at the end of 2019 would be worth nearly $24,000 at the time of this writing.

The compound annual growth rate (CAGR) over the same five-year period is 18.8%, better than S&P 500is 15.8%.

Plus, this fund charges low fees, with an expense ratio of just 0.04% — among the lowest of any ETF. That means you pay just $4 a year in fees for every $10,000 you invest in this great ETF.

ETF Vanguard US Quality Factor

My second unstoppable Vanguard fund that I buy and own is Vanguard US Quality Factor ETFs (VFQY -0.47%).

I’m passionate about growth stocks, but I’m not blind to the fact that for many other people, value investing is their preferred method. And for them, this Vanguard fund is a great find.

The Vanguard US Quality Factor ETF is actively managedsomething rare for the company. However, it still has a modest expense ratio of 0.13%, meaning investors pay just $13 a year in fees for every $10,000 invested.

The fund relies on a quantitative methodology for selecting and weighting its holdings. As a result, they are diverse and constantly changing. As of this writing, it matters NIKE, Aim, 3Mand Apple among them top holdings — figuring those stocks are good value When compared to their rivals.

This ETF has tracked the benchmark S&P 500 over the past five years. As of 2019, it has generated a 94% return — meaning a $10,000 investment made in 2019 would be worth about $19,500 at the time of this writing. The fund’s 14.2% CAGR is the S&P 500’s 15.8% over the same period.

However, the ETF’s recent performance isn’t terrible and shouldn’t scare off potential investors. Growth stocks have outperformed value stocks in recent years, and this fund focuses on identifying and holding stocks with strong value characteristics that are sometimes less volatile than their growth-oriented peers.

Each of these Vanguard funds is worth buying and holding for the long term, but for very different reasons. Growth-focused investors would be wise to consider the Vanguard Growth ETF, while value investors should take a closer look at the Vanguard US Quality Factor ETF.