There are a few issues that go into making a great long-term portfolio holding.
ETFs should be broadly diversified around a market or theme. They should come with ultra-low expense ratios. And you should simply be ready to clarify what they do and how they decide shares.
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Vanguard is very good at this. They largely keep away from getting into thematic concepts and focus on what they do best, which is to offer low-cost index funds tied to standard markets, sectors, and kinds.
There are two Vanguard ETFs in explicit that are ideally constructed to be long-term holdings but for totally different causes.
Vanguard Total Stock Market ETF
The Vanguard Total Stock Market ETF (NYSEMKT: VTI) can serve as the basis of a diversified portfolio. Its goal is easy: Target the whole investable U.S. equity universe.
It owns roughly 3,500 firms of all sizes across every industry and sector. Many people desire the Vanguard S&P 500 ETF (NYSEMKT: VOO) as a core place, and that’s definitely defensible. I desire to own large-, mid-, and small-cap shares for the inevitable durations where market management adjustments.
Vanguard Dividend Appreciation ETF
The Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) takes a more conservative method by concentrating on well-established firms with at least 10 consecutive years of dividend growth. These firms have a tendency to be more mature with more healthy stability sheets. Plus, the dividend income offers a source of return in addition to the long-term capital growth potential.
While each of these ETFs can work great individually, they also complement each other nicely and can act as a sturdy portfolio basis for many years to come.
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