2 Simple ETFs to Buy With $1,000 and Hold for a Lifetime

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Jake Lerch, The Motley Fool

Wed, Apr 2, 2025, 4:45 AM 4 min read

Just support it simple. It's large proposal that applies to galore situations passim life. Today, let's absorption connected however keeping it elemental tin pb to fantabulous investing returns. Here are my 2 picks for elemental exchange-traded funds (ETFs) that anyone tin bargain and clasp everlastingly for lone $1,000.

A jar afloat of $100 bills connected a woody table.

First up is the Vanguard Growth Index Fund ETF (NYSEMKT: VUG). For those investors who privation to acceptable it and hide it, the Vanguard Growth ETF is an charismatic choice. The money focuses connected large-cap maturation stocks, so, unsurprisingly, it's heavy weighted toward the "Magnificent Seven."

Indeed, Nvidia, Apple, Microsoft, Alphabet, Meta Platforms, Amazon, and Tesla comprise implicit 54% of the fund's full holdings. However, that shouldn't beryllium a crushed to debar this fund. Given those stocks' large weighting wrong cardinal benchmark indexes, similar the S&P 500, the Vanguard Growth ETF is simply a coagulated prime for astir portfolios.

In fact, not lone has the fund kept up with the performance of the benchmark index implicit the past 10 years, the fund has bushed it. Dating backmost to 2015, the money has generated a compound yearly maturation complaint (CAGR) of 14.2%, besting the S&P 500's CAGR of 12.5%.

What's more, investors tin pat into this outperformance astatine an highly debased cost. The money charges an disbursal ratio of 0.04% -- making it 1 of the cheapest ETFs around. For example, a idiosyncratic who invests $10,000 successful the money volition wage lone $4 a twelvemonth successful fees. Given its debased fees and coagulated performance, semipermanent investors should springiness beardown information to this elemental ETF.

Next is the Vanguard High Dividend Yield Index Fund ETF (NYSEMKT: VYM). While the Vanguard Growth ETF is cleanable for growth-seeking investors oregon those with galore years until retirement, the Vanguard High Dividend Yield Index ETF offers up a antithetic proposition. This money is focused connected delivering income for its investors, truthful its holdings bespeak an income-oriented attack with plentifulness of worth stocks.

Its apical holdings database would marque Warren Buffett proud, with stocks similar Bank of America, Coca-Cola, and Chevron, on with different iconic companies similar JPMorgan Chase, Broadcom, Walmart, ExxonMobil, and Procter & Gamble.

As evidenced by its holding list, there are galore stocks from the financial, energy, and healthcare sectors. Many of these stocks wage dividends. Consequently, the money generates a decent magnitude of income that is then distributed to its investors.

As of this writing, the money boasts a dividend output of 2.9%. Although this isn't the highest dividend output investors tin find among ETFs, there are reasons that income-seeking investors whitethorn inactive privation to see this fund. Most notably, it boasts a rock-bottom disbursal ratio of 0.06%. That means investors support much of their hard-earned wealth astatine work, arsenic they volition wage lone $6 a twelvemonth successful fees for each $10,000 invested successful the fund.