2 Top Vanguard ETFs to Buy Right Now and Hold Forever

^GSPC +0.25% VUG +0.55%

Key Points

• Picking stocks is difficult, but investing in index ETFs is a great way to begin investing for the long term.

• Few actively managed funds beat the S&P 500 over the long run, making an S&P 500 ETF a great choice.

• With growth stocks continuing to lead the market higher, the Vanguard Growth ETF is a great ETF to invest in.

• 10 stocks we like better than Vanguard S&P 500 ETF ›

December is often a good month for stocks, so there is no time like the present to get into the market. But for investors who are just getting started with investing, jumping into the market near all-time highs could be nerve-racking.

Those fears also aren't completely unfounded. Picking individual stocks is tough, and J.P. Morgan actually found that between 1980 and 2020, about 40% of stocks had negative returns. Meanwhile, only about 13% of actively managed funds run by professional investors have beaten the benchmark S&P 500 index over the past decade.

That said, these statistics shouldn't keep you from investing. Instead, they should help guide how you invest. For the average person, the best way to start investing is through an exchange-traded fund (ETF). These ETFs can give you an instant portfolio of stocks that track the performance of a stock market index.

However, to truly build wealth over time, investing in one or two index ETFs is just half the battle. Don't worry, though, the second key to investing isn't difficult. Instead of just buying an ETF and letting it sit, you're going to want to employ what is called a dollar-cost averaging strategy. This is simply investing the same amount each month, regardless of how the market is performing, over a long period of time. This is important because when investors try to time the market, it often ends badly.

The market hitting all-time highs isn't uncommon; it happens on about 7% of all trading days, so waiting for a pullback can lead to missed gains. Meanwhile, most of the market's biggest gains often happen after large pullbacks, so you don't want to stop investing during a bear market and miss out on the rebound.

Let's look at two great Vanguard ETFs you can start buying right now and hold on to for the long term.

Vanguard S&P 500 ETF

If you can't beat them, join them. As noted above, few actively managed funds outperform the S&P 500 index, so a simple strategy is to just invest in an ETF that mimics its performance. The Vanguard S&P 500 ETF (NYSEMKT: VOO) is a great option given its low expense ratio (0.03%) and near-perfect correlation.

With an investment in this ETF, you're getting an instant portfolio of approximately 500 of the largest U.S. companies. The S&P 500 is a market capitalization (market cap) weighted index, which means the larger a company is, the greater the percentage of the index it is, so bigger companies, such as Nvidia and Apple, have more influence on its performance than smaller companies.

The ETF has a strong track record, with an average annual return of 14.6% over the past decade and 17.6% over the past five years, as of the end of September.

Vanguard Growth ETF

Growth stocks have outperformed value stocks for much of the past 20 years, which is why the Vanguard Growth ETF (NYSEMKT: VUG) is another great low-cost (0.04% expense ratio) option. It officially tracks the performance of an index called the CRSP US Large Cap Growth index, which is basically just the growth side of the S&P 500.

Like the S&P 500, this is a market cap weighted index; however, you're getting a more concentrated portfolio. With this ETF, you'll own 160 stocks in the S&P 500 that are considered growth stocks. As such, the fund is largely made up of stocks from the technology (63%) and consumer discretionary (18%) sectors.

Overall, the ETF has been a strong performer, with a yearly average return of 17.4% over the past 10 years and 18.4% over the past five years. If growth and artificial intelligence (AI) stocks are going to continue to lead the market higher over the next decade, this is a great ETF to buy and hold for the long term.

Should you buy stock in Vanguard S&P 500 ETF right now?

Before you buy stock in Vanguard S&P 500 ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard S&P 500 ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $588,530!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,102,885!*

Now, it’s worth noting Stock Advisor’s total average return is 1,012% — a market-crushing outperformance compared to 193% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

See the 10 stocks »

*Stock Advisor returns as of December 1, 2025

JPMorgan Chase is an advertising partner of Motley Fool Money. Geoffrey Seiler has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Apple, JPMorgan Chase, Nvidia, Vanguard Index Funds-Vanguard Growth ETF, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

2 Top Vanguard ETFs to Buy Right Now and Hold Forever was originally published by The Motley Fool