Diversification is essential to your success as an investor. You don't want your retirement to hinge on the fortunes of a single company or industry.

But you don't need to choose dozens of stocks to diversify your investment portfolio. Investing in exchange-traded funds (ETFs) allows you to automatically diversify, because ETFs invest your money across hundreds or even thousands of companies. If you're looking for investments that can bankroll your retirement, look no further than these three ETFs.

Two people counting cash.

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1. Vanguard S&P 500 ETF

There are no guarantees in investing. But an S&P 500 index fund is about as close as you can get -- provided that you have the patience to ignore the short-term ups and downs of the stock market and keep your money invested for the long haul. Your money gets invested in 500 of the largest publicly traded companies in the U.S. Over a 20-year holding period, investing in the S&P 500 index has always produced positive returns.

The Vanguard S&P 500 ETF (VOO -0.75%) is a smart choice because it has a super cheap expense ratio of 0.03%. That means just $3 of a $10,000 investment goes toward fees. Since its inception in 2010, the fund has averaged annual returns of 13.15% -- almost identical to the 13.19% produced by the S&P 500, its benchmark index.

2. Vanguard Total International Stock ETF

While an S&P 500 index fund is the ideal backbone for your retirement portfolio, it's also smart to diversify beyond U.S. stocks. Though U.S. stocks have outperformed international stocks in recent years, that hasn't always been the case. For example, the 2001-2010 decade is often referred to as a "lost decade" for domestic stocks, with U.S. stocks delivering average annualized returns of only 1.4%.

But during that same decade, international developed markets had average annualized returns of 3.5%, according to Charles Schwab research. And emerging market stocks were the star performers, with average annualized returns of 15.9%.

The Vanguard Total International Stock ETF (VXUS -0.96%) is a great option if you're seeking exposure to foreign markets. The fund tracks the FTSE Global All Cap ex US Index, an index of more than 7,000 stocks outside the U.S. About 75% of the fund's holdings are in developed markets, with its heaviest concentrations in Japan, the United Kingdom, and Canada. The remaining 25% of its holdings are in emerging markets, which are risky compared to developed markets. But they also offer the potential for high growth, given that about 85% of the world's population lives in emerging-market countries.

The fund has an expense ratio of 0.07%. That makes it a bargain, considering that similar funds have an average expense ratio of 0.91%. 

3. iShares Core U.S. Aggregate Bond ETF

Rising interest rates have made 2022 a terrible year for the bond market. But in normal times, bonds provide stability compared to stocks, which is why you should have a small percentage of your portfolio invested in bonds.

The iShares Core U.S. Aggregate Bond ETF (AGG -0.27%) offers broad exposure to U.S. bonds. Its benchmark index is the Bloomberg US Aggregate Bond Index, which represents the overwhelming majority of the investable U.S. bond market. With an expense ratio of just 0.04%, the fees are about as low as you can get.

This fund won't be a major driver of growth in your portfolio. But it can also reduce its long-term volatility while also providing regular income. That's especially true in years like 2022, since bond prices and yields are inversely related. As of Nov. 29, 2022, the fund had a 30-day Securities and Exchange Commission (SEC) yield of 4.08%.

How to invest in ETFs

Investing in ETFs is easy. You buy them and sell them on stock exchanges, just as you would with individual securities. Simply open and fund a brokerage account, and you can start investing in ETFs.

Building a retirement portfolio doesn't have to be complicated. A handful of ETFs is all you need to create a substantial nest egg.