You don't need to be a great stock picker to generate strong returns from your investments. In a lot of cases, all you really need is to find a good exchange-traded fund (ETF), or perhaps a few of them, and to have a great deal of discipline.
Finding some strong ETFs to put your money into and having the discipline to leave it alone and remain invested for not only years but decades can set you up for significant long-term gains.
Vanguard ETFs are especially attractive options to hold for the long term because they can give you access to a broad mix of stocks, and they charge low fees. A great option for growth investors to consider today is the Vanguard Russell 1000 Growth Index Fund (VONG 1.53%). It has achieved some impressive results in recent years, and it checks off all the necessary items you need to set yourself up for long-term growth.
Here's why it can be a great investment to hang on to forever.
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This ETF's focus on growth stocks has enabled it to post terrific returns
In just five years, the Vanguard Russell 1000 Growth Index Fund has risen by around 110%. And when you include its dividend, then its total returns are up to about 118%. By comparison, over the same time frame, the broader S&P 500 index has generated total returns of about 106%.
The Vanguard fund focuses on top U.S. growth stocks, and about 60% of its holdings are in tech. Its five largest holdings are Nvidia, Microsoft, Apple, Amazon, and Meta Platforms. Together, they account for 46% of the ETF's total portfolio.
Although there are 390 stocks in the fund, these heavy hitters play a big role in determining the fund's overall performance. And with many of them doing well in recent years, it's no surprise that the ETF has delivered such strong returns for investors.
A diversified option to hang on to for the long haul
While the Vanguard fund is heavily tilted toward tech stocks, it does still offer good diversification, providing investors with exposure to other sectors as well, including consumer discretionary, industrials, and healthcare. They each make up more than 5% of the ETF's overall portfolio.
There will likely be volatility with the fund because of its focus on growth stocks, and there will inevitably be bad years for the ETF when the economy isn't doing well. But when investing for the long term, the overall market should rise in value. On average, the S&P 500 has risen by 10% per year, for decades.
And growth stocks can potentially deliver better-than-average returns. This is where having a disciplined approach and remaining invested for the long term can be a key part of growing your wealth.
Low costs make the fund an ideal place to invest in on a regular basis
A key aspect of the fund that will be attractive for long-term investors is its low expense ratio of just 0.07%. Over time, fees can add up and chip away at your gains, which is why focusing on a fund with low costs can ensure that your returns are as high as possible.
Whether you're investing a lump sum or planning to invest regularly into the stock market, putting your money into this Vanguard ETF can be a great way to grow your portfolio's balance in the long run.
With low fees, good diversification, and a focus on top growth stocks, the Vanguard Russell 1000 Growth ETF can be a terrific pillar to build your portfolio with. It has more than doubled in the past five years, and there can be plenty more gains ahead for long-term investors.
