If you’re a long-term investor looking to diversify your growth portfolio, there are a number of exchange-traded funds that can help you reach your goals. Exchange-traded funds, or ETFs, are like mutual funds in that they hold multiple securities, but they trade on an exchange like a stock. This makes them very easy to buy and sell, and they generally have low internal expenses as well.
Top 10 Long-Term ETFs To Consider Right Now
With a single purchase, you can track any number of different sectors or market indices, from international small-cap or dividend stocks to the entire U.S. stock market. While there are literally thousands of ETF options and many excellent ETFs, here are 10 that do a great job of covering various areas of the stock market:
- Invesco Solar ETF (TAN)
- iShares Core S&P U.S. Growth ETF (IUSG)
- Invesco S&P 500 GARP ETF (SPGP)
- Invesco KBW Property & Casualty Insurance ETF (KBWP)
- iShares U.S. Healthcare ETF (IYH)
- The Technology Select Sector SPDR Fund (XLK)
- iShares MSCI EAFE ETF (EFG)
- ProShares Ultra Utilities (UPW)
- Vanguard High Dividend Yield ETF (VYM)
- Invesco QQQ Trust (QQQ)
1. Invesco Solar ETF (TAN)
- Price as of June 16: $72.79
The Invesco Solar ETF is one of the few that has both recent gains and a 10-year track record of excellent performance. It tracks the MAC Global Solar Energy index, which weights companies by market cap. The ETF has $2.09 billion in assets under management, 45 holdings in its portfolio and a low 0.69% expense ratio. Over the last 10 years, TAN has delivered average annual returns of 13.23%.
2. iShares Core S&P US Growth ETF (IUSG)
- Price as of June 16: $96.58
The iShares Core S&P U.S. Growth ETF is another popular market-tracking ETF, with $13.47 billion in assets under management. The ETF tracks U.S. mid- and large-cap growth stocks, selecting equities based on sales growth, price-to-earnings ratio changes and momentum. This fund has a low 0.04% expense ratio, and its 10-year average annual returns are 13.80%.
3. Invesco S&P 500 GARP ETF (SPGP)
- Price as of June 16: $89.53
The Invesco S&P 500 GARP ETF tracks S&P 500 stocks and makes selections according to growth, quality and value, weighted by growth. This is a smaller fund, with just 73 holdings and $3.78 billion in assets under management. However, it was established in 2011, which means it has a solid track record, and it has returned an average of 14.75% per year over the last 10 years.
4. Invesco KBW Property & Casualty Insurance ETF (KBWP)
- Price as of June 16: $82.73
The Invesco KBW Property & Casualty Insurance ETF tracks the KBW Nasdaq Property & Casualty Index, which consists solely of property and casualty insurance companies, weighted by market cap. The fund has lost 4.76% year to date but gained 8.51% over the last year. KBWP is a small fund, with $329.18 million in assets under management, and its 10-year average annual return is an impressive 11.29%.
5. iShares US Healthcare ETF (IYH)
- Price as of June 16: $278.36
The $3.17 billion iShares U.S. Healthcare ETF showed more modest losses last year than many broad funds, and its long-term returns are highly competitive. It tracks the Russell 1000 Health Care RIC 22.5/45 Capped Index and has 114 holdings that include the largest pharmaceutical, healthcare and biotechnology companies in the U.S. The fund has a low 0.39% expense ratio. Over the last 10 years, it has produced average annual returns of 12.08%.
6. The Technology Select Sector SPDR Fund (XLK)
- Price as of June 16: $173.19
If you’re looking for a little more punch in your growth stock portfolio, take a look at the Technology Select Sector SPDR Fund. This ETF is dedicated to specific sectors of the market rather than tracking a broad market index. As a more narrowly focused ETF, this fund can be more volatile than the broader index funds, but it may also offer the potential for greater returns.
Over the past 10 years, the performance of the Technology Select Sector SPDR Fund has been nothing short of spectacular, posting an annualized return of 20.45% over 10 years. However, investors should note that the fund is top-heavy, with just two stocks, Apple and Microsoft, now comprising over 46% of the ETF’s portfolio.
7. iShares MSCI EAFE ETF (EFG)
- Price as of June 16: $96.90
For a little more diversification to your growth portfolio, consider an international ETF. The iShares MSCI EAFE ETF owns large- and mid-cap stocks from developed nations spanning Europe, Australia, Asia and the Far East, with Japanese equities making up over 20% of holdings. Since it can be hard for American investors to get enough information to make qualified judgments on individual foreign stocks, owning an ETF can be a great way to get some international exposure without having to make blind guesses about specific companies.
The MSCI EAFE ETF has returned an average of 6.14% per year for the last 10 years. It owns 426 stocks, including many names that are familiar to Americans, from Nestle and AstraZeneca to LVMH, which is the world’s largest luxury goods conglomerate and the parent company of Louis Vuitton, Givenchy, Dior and Tiffany.
8. ProShares Ultra Utilities (UPW)
- Price as of June 16: $61.51
The ProShares Ultra Utilities ETF tracks the market-cap-weighted S&P Utilities Select Sector Index of S&P 500 U.S. utility companies. It’s considered a short-term investment, holding swap agreements and resetting daily. That said, UPW has returned an average of 12.40% per year for the last 10 years and has performed comparatively well over the last year compared to broad index funds.
9. Vanguard High Dividend Yield ETF (VYM)
- Price as of June 16: $107.10
The Vanguard High Dividend Yield ETF tracks the FTSE High Dividend Yield Index, which looks at the performance of stocks from companies that pay high dividend yields. Among its holdings are Dividend Aristocrats like Johnson & Johnson, Procter & Gamble and ExxonMobil. Over the last 10 years, the ETF has produced annualized returns of 9.81%.
10. Invesco QQQ Trust (QQQ)
- Price as of June 16: $367.93
The Invesco QQQ Trust ETF is among the best known. Tracking the Nasdaq-100 Index, the ETF’s 102 holdings include a diverse selection of nonfinancial stocks listed on the Nasdaq. Holdings are weighted toward tech but also include non-tech growth and large-cap holdings. Although the price had dipped 10.51% over the last year as of March 31, it’s now up nearly 40% year to date and has a 10-year annualized return of 18.84% as of June 16.
Daria Uhlig contributed to the reporting for this article.
Data is accurate as of June 16, 2023, and is subject to change.
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