If I Were Brand New to Investing, This Is the 1 Surefire ETF I'd Buy and Hold for the Next 30 Years

Source Motley_fool

Key Points

  • The S&P 500 encompasses 500 of America's biggest companies.

  • This S&P 500 index fund charges a minuscule annual fee.

  • It also sports a solid, long-term track record.

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

For inexperienced and experienced investors alike, investing in the Vanguard S&P 500 ETF (NYSEMKT: VOO) is a fine idea -- especially if you aim to hold for many years or decades. It's an exchange-traded fund -- a fund that trades like a stock -- and it tracks the S&P 500, which comprises 500 of America's biggest companies.

Indeed, while there are thousands of stocks in the U.S., these 500 make up around 80% of the total value of the U.S. stock market. That's why the S&P 500 is often used as a proxy for the total U.S. stock market.

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Image source: Getty Images.

Below are the index's recent top 10 components, by weight, as of Oct. 23 -- which together make up about 38% of the index's value:

Stock

Percent of ETF

Nvidia

7.34%

Apple

7.31%

Microsoft

5.61%

Amazon.com

3.86%

Alphabet Class A

2.91%

Alphabet Class C

2.71%

Meta Platforms

2.36%

Broadcom

2.22%

Tesla

2.12%

Berkshire Hathaway

1.67%

Data source: Slickcharts.com.

You can see that there's a lot of disparity in the weightings, and that's because, like many indexes, the S&P 500 is market-cap weighted, meaning that bigger companies will wield more influence than smaller ones. That can reasonably be viewed as a problem right now, because most of the index's value is held in the top holdings, and smaller index components will have little chance of moving the needle. (Those who would rather own a fund that holds each component in roughly equal measure should check out the Invesco S&P 500 Equal Weight ETF (NYSEMKT: RSP).)

Here's how VOO has performed in recent years:

ETF

3-Year Avg. Annual Return

5-Year Avg. Annual Return

10-Year Avg. Annual Return

Vanguard S&P 500 ETF

23.54%

12.58%

15.45%

Data source: Morningstar.com, as of Oct. 22, 2026.

Pretty good, eh? (Note, though, that over many decades, its average gain has been closer to 10%.)

Why invest in the Vanguard S&P 500 ETF?

Here are some reasons why I like this index fund:

  • It sports an ultra-low expense ratio (annual fee) of just 0.03%, costing you only $3 per $10,000 you invest in the fund.
  • It offers diversification, spanning many industries. When one drops sharply, the others can offset that to some degree.
  • It can outperform many growth stocks, especially overvalued ones.
  • It contains both growth stocks and value stocks, dividend payers and non-payers. It's broad!

I would also argue that the heavy weighting of big tech stocks isn't necessarily problematic. They're huge and influential because the companies have grown so robustly over the years -- because they're doing a lot of things right. Meanwhile, those who manage the S&P 500 index regularly cull less-well-performing stocks and add more relevant companies. It's not a static group of stocks.

Give this solid ETF some consideration for your long-term portfolio, understanding that when the market pulls back, as it occasionally will, so will this ETF. But over many years, the S&P 500 has always recovered from drops and gone on to set new highs.

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 $337,166!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,339,143!*

Now, it’s worth noting Stock Advisor’s total average return is 904% — a market-crushing outperformance compared to 213% 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.

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*Stock Advisor returns as of October 28, 2026.

Selena Maranjian has positions in Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, Meta Platforms, Microsoft, Nvidia, Tesla, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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