Large-cap blend funds invest in a combination of growth and value stocks, typically with market capitalizations of $10 billion or more, and can help add diversification and broad exposure to large U.S. businesses. Because individual stocks can be quite volatile, an exchange-traded fund, or ETF, can be the smartest way to buy stocks for most Americans.

Why invest in large-cap blend stock ETFs?

While there are no set-in-stone criteria, value stocks are generally defined to be those trading for attractive valuations relative to the market or peer group average. Generally, value stocks tend to be established, dividend-paying companies with steadily growing revenue and earnings. They also tend to be less volatile than the stocks of faster-growing companies.

Stock quotes in a newspaper.

Image source: Getty Images.

On the other hand, growth stocks are loosely defined as those with higher-than-average earnings or revenue growth. Growth stocks tend to not pay dividends, as they often prefer to reinvest as much as possible in their businesses to fuel further growth.

Regardless of whether you're investing in growth or value stocks, there is still a lot of potential for volatility when buying any individual stock. For investors who want the growth and income potential of value stocks, but don't want the research and the inherent risks that come with choosing individual stocks, a large-cap blend stock ETF could be the best way to invest, as it invests your money in a diverse group of stocks and allows you to reap the benefits of both value and growth investing.

3 top large-cap blend ETFs

If you're looking for broad exposure to large American corporations, here are three ETFs that track different stocks indexes that could be smart additions to your portfolio.

Fund Name

Expense Ratio

Dividend Yield

5-Year Average Total Return

Vanguard 500 Index Fund ETF (NYSEMKT:VOO)

0.04%

1.89%

15.4%

Schwab US Broad Market ETF 

(NYSEMKT:SCHB)

0.03%

2.16%

15.2%

Vanguard Mega Cap Index Fund ETF 

(NYSEMKT:MGC)

0.07%

1.97%

15.3%

Data source: TD Ameritrade. Expense ratios and assets are current as of June 29, 2017, and returns are as of May 31, 2017.

1. Vanguard 500 Index Fund ETF

The Vanguard 500 Index Fund ETF is an S&P 500 index fund that's widely popular among American investors with $325 billion in total assets. As the name suggests, the fund invests in the 500 stocks that make up the S&P 500 index, with higher weights given to larger components such as Apple, Microsoft, Amazon, and Facebook. Warren Buffett has called a S&P 500 index fund the best investment most Americans can make, and used Vanguard's product in a bet to show that over time, a passive investment in American business will beat high-cost hedge funds.

2. Schwab U.S. Broad Market ETF

All three of the ETFs on this list have remarkably low fees, but with an expense ratio of just 0.03%, the Schwab U.S. Broad Market ETF is the cheapest of all. As the name implies, this fund doesn't just invest in the largest 500 U.S. companies, but rather spreads your money out among the broader market. As of this writing, the fund invests in over 2,000 different stocks. Although this isn't solely a large-cap fund, the vast majority of the fund's assets are in large-cap companies, and the added investments into some smaller companies helps reduce the "top-heavy" effect of the S&P 500.

3. Vanguard Mega Cap Index Fund ETF

The Vanguard Mega Cap Index Fund ETF takes the opposite approach. Instead of diversifying into small- and mid-cap stocks, it simply focuses on the largest U.S. companies. The fund currently owns 277 stocks, and its largest holdings are exactly the same as the other two funds. As a general rule, larger companies are more mature and therefore are less volatile, so this fund allows investors to concentrate their money in the largest of the large-cap stocks.

Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. Matthew Frankel owns shares of Apple. The Motley Fool owns shares of and recommends Amazon, Apple, and Facebook. The Motley Fool has a disclosure policy.