The best long-term ETFs allow investors to easily build a diversified portfolio. They can provide broad exposure across many asset classes, industries, and geographies. This diversification can help an investor reduce risk without sacrificing long-term returns.
There are many exchange-traded funds (ETFs) built for long-term investors. Here's a closer look at several top ETFs that make ideal buy-and-hold investments.
Best long-term ETFs
The best ETFs for the long term hold a diversified portfolio of stocks while charging a very low ETF expense ratio. Although many funds share those two key characteristics, here are the top ETFs for long-term investors:
Exchange-Traded Fund (ETF)
1. Vanguard S&P 500 ETF
NYSEMKT: VOO
Key Data Points
2. Invesco S&P 500 Equal Weight ETF
Gross Expense Ratio
3. iShares Russell 1000 Growth ETF
4. Vanguard Real Estate ETF
5. Schwab U.S. Dividend Equity ETF
Top 5 Sectors | Top 5 Geographies |
|---|---|
Financials (22.1% of the fund's holdings) | Japan (23.6%) |
Industrials (19.6%) | United Kingdom (14.5%) |
Healthcare (10.4%) | France (10%) |
Consumer discretionary (10.2%) | Germany (9.5%) |
Information technology (8.5%) | Switzerland (8.8%) |
The iShares Core MSCI EAFE ETF charges a very low expense ratio of 0.07%, allowing investors to add some international exposure to their portfolios at a low cost and benefit from the long-term growth of the global economy.
7. iShares Core 60/40 Balanced Allocation ETF
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Why ETFs are good for long-term investors
ETFs can be great building blocks for long-term investors. They can provide:
- Broad exposure: ETFs allow you to instantly invest across the entire stock market, different countries, and specific industries.
- Diversification: ETFs enable you to build a diversified portfolio quickly.
- Lower risk: They can help reduce the overall risk profile of your portfolio.
- Low costs: Many of the best long-term ETFs have a relatively low expense ratio.
- Passive investments: ETFs are very passive investments. They allow you to invest in the market without actively managing a portfolio of stocks.
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