Do you want to become richer? 2 Top ETFs to Buy Now

Exchange-traded funds (ETFs) can provide you with simple and inexpensive ways to invest in the stock market. Some of the best funds make it easy to quickly gain exposure to a range of promising investments, such as dividend stocks and fast-growing small businesses. Here are two ETFs that seem particularly well-positioned to deliver lucrative gains to their shareholders.

This dividend-paying ETF can help you grow your passive income

When you are rewarded with a steady stream of cash payments from your portfolio, the benefits of investing become clear. You can use dividend income to pay your bills, reduce debt, or invest in other wealth-building opportunities.

Better yet, dividend-paying stocks tend to hold up relatively well during market downturns. They are also usually less volatile than non-dividend paying stocks. Plus, stocks that consistently grow their cash payouts can help you generate generous streams of passive income that grow steadily over time.

If these aspects of dividend investing appeal, consider it Schwab US Dividend Equity ETF (SHD 0.39%). This low-cost fund tracks an index made up of financially sound companies with proven histories of supporting dividend payments to shareholders. This smart strategy has helped the Schwab ETF triple its investors’ money over the past decade.

SCHD Total Return Price Data by YCharts

To be eligible for inclusion in the Schwab US Dividend Equity ETF index, a company must have at least 10 consecutive years of dividend payments. The index prioritizes businesses with solid profitability metrics and reasonable debt levels. Stocks are analyzed and ranked based on performance fundamentals such as return on equity and free cash flow, as well as shareholder return indicators such as annual dividend yield and five-year dividend growth rate.

With positions in about 100 companies, the Schwab ETF is well-diversified across sectors. Major holdings include dividend creditors Home Depot, Verizon Communications, Chevron, Lockheed Martinand Coca cola.

Importantly, Schwab charges low fees, so almost all of the fund’s profits will go to shareholders. The Schwab US Dividend Equity ETF has an annual expense ratio of 0.06%, which equates to just $0.60 per $1,000 invested per year.

This small-cap ETF can boost your gains

Small-cap stocks can add another strong growth element to your portfolio Vanguard Russell 2000 ETF (VTWO 1.41%) gives you an easy way to invest in these high-potential and fast-growing businesses. It’s a smart approach that has generated total shareholder returns of over 125% over the past 10 years.

VTWO Total Return Level data by YCharts

As the name suggests, the Vanguard ETF holds holdings in about 2,000 stocks. With an average market cap of $3 billion, these small- and mid-cap companies tend to have plenty of room for further growth. The Vanguard fund thus matches well with the Schwab US Dividend Equity ETF, which holds mostly large-cap stocks. Owning both ETFs can give you a solid mix of proven performers and upstarts.

Moreover, many of the stocks held by the Vanguard Russell 2000 ETF will benefit from economic stimulus measures. The Federal Reserve recently cut interest rates for the first time since early 2020, and the central bank is expected to implement more rate cuts in the coming months. Falling interest rates tend to have a tremendous impact on smaller businesses that rely heavily on loans to finance their expansion. Lower funding costs, in turn, could spark a strong rally in small-cap stocks.

The Vanguard Russell 2000 ETF, with a low annual expense ratio of 0.1%, is a smart and inexpensive way to profit from a potential small-cap boom.