Unlock Long-Term Wealth: Top 3 Vanguard ETFs to Invest $1,500 in Forever

Exchange-traded funds (ETFs) offer a straightforward approach to investing by consolidating multiple stocks under one ticker symbol, thus providing immediate diversification. Some ETFs track major stock indices while others may focus on specific sectors or strategies.

Vanguard stands out as one of the leading investment companies globally. It is unique in that it is owned by the investors in its funds, not external shareholders. This makes Vanguard an attractive option for those looking to invest in ETFs with a long-term perspective.

Here are three Vanguard ETFs that cater to diverse investor needs. These funds are ideal for a long-term investment strategy, and acquiring all three could cost less than $1,500 total. Alternatively, you can choose the ETFs that best match your investment style.

1. The Vanguard ETF endorsed by Warren Buffett

Legendary investor Warren Buffett, known for his keen stock picking skills, includes the Vanguard S&P 500 ETF (NYSEMKT: VOO) in his portfolio.

This ETF mirrors the S&P 500, which is a market-cap-weighted index comprising 500 of the largest U.S. companies. It is one of the most well-recognized stock market indices and often represents the overall U.S. market. The ETF offers exposure to a wide range of industries, including major tech companies.

Historically, the S&P 500 has been a powerful vehicle for wealth creation. Since it began in its current form in the 1950s, it has turned a $100 investment into more than $36,000—excluding dividends. Over the last 50 years, it has averaged about an 8% return annually. The Vanguard S&P 500 ETF provides a practical way to invest in this index.

2. An excellent ETF for growth-focused investors

If you are seeking higher potential returns and can tolerate more risk, the Vanguard Growth ETF (NYSEMKT: VUG) might be suitable. It tracks the CRSP US Large Cap Growth Index, which includes 181 large-cap growth stocks.

This fund invests more heavily in top tech stocks compared to the broader S&P 500, with about 52% of its portfolio dedicated to leading technology firms. The remaining holdings are spread across 174 other stocks, providing a degree of diversification.

Historically, sectors like AI, cloud computing, semiconductors, and e-commerce have driven growth in the technology sector, which supports the potential of this ETF. With an expense ratio of only 0.04%, it’s a cost-effective option for those focused on growth.

The Vanguard Growth ETF has proven to be a solid investment for those comfortable with a significant concentration in a few large tech stocks.

3. An ETF for earning passive income

For investors prioritizing passive income over capital growth, the Vanguard High Dividend Yield ETF (NYSEMKT: VYM), which follows the FTSE High Dividend Yield Index, is worth considering.

This ETF is comprised of 537 stocks, including stable dividend payers like Broadcom, Home Depot, Procter & Gamble, Johnson & Johnson, and Chevron. It offers a healthy dividend yield of 2.6%, with the underlying companies averaging 10% earnings growth. The dividends are expected to increase over time, enhancing passive income potential.

With an expense ratio of just 0.06%, this ETF allows investors to avoid the complexities of managing a large portfolio of dividend stocks. While it has less exposure to the high-growth tech sector, its focus on reliable dividend growth makes it a compelling choice for income-focused investors.

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