New Investors: Build Your Portfolio Around These 2 Rock-Solid ETFs

If you're getting started with investing and don't know which stocks to put in your portfolio, a good option is to begin with exchange-traded funds (ETFs). These funds invest in many different stocks, in some cases hundreds and even thousands, depending on the ETF that you select.

A couple of ETFs you may want to consider investing in when building out your portfolio are the Vanguard Growth ETF (NYSEMKT: VUG) and the ProShares S&P 500 Dividend Aristocrats® ETF (NYSEMKT: NOBL). (Note that Dividend Aristocrats® is a registered trademark of Standard & Poor’s Financial Services LLC.)

Between these two funds, you'll be able to collect plenty of dividend income and benefit from the growth of many of the top stocks in the world.

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1. Vanguard Growth ETF

The Vanguard Growth ETF provides you with a quick and easy way to gain exposure to many of the world's top growth stocks. It has around 150 holdings, with the majority (66%) coming from the tech sector. The top holdings in the fund feature big names such as Nvidia, Apple, and Microsoft, which together account for 35% of the entire portfolio.

By targeting these types of fast-growing stocks, that can enable you to generate strong gains over the long term. And with the ETF's low expense ratio of 0.04%, the costs will be minimal; on a $10,000 investment, you'd be incurring just $4 in fees per year. Over time, as your balance grows, the fees would increase as well, but they'd be minimal with respect to the value of your investment.

Over the past five years, this growth-focused fund has outperformed the S&P 500, rising by 92% in value, while the broader index is up by 83%. By focusing on growth stocks, that can enable you to generate stronger returns. There can be a bit more risk with these types of investments, but over the long term, you can put yourself in an excellent position to potentially outperform the market.

2. ProShares S&P 500 Dividend Aristocrats ETF

This ProShares S&P 500 Dividend Aristocrats® ETF invests in some of the best dividend stocks, and it can provide your portfolio with a lot of recurring income. The fund currently yields 2.1%, which may not sound like a lot, but that's close to double what the average S&P 500 stock pays (1.1%).

The fund's focus is on investing in stocks that have strong earnings and fundamentals, and that have also been growing their dividend payments for at least 25 consecutive years. Albemarle, Cardinal Health, and Caterpillar are among its top 10 holdings. A great feature about the ETF's portfolio is that there's some solid diversification -- the largest holding only accounts for 2% of the fund. This is important from a risk standpoint, as it means even if one stock struggles, that may not have much of an effect on the overall ETF's performance.

As of the end of last year, there were 69 companies in the ETF, with an average market cap of $103 billion. With this fund, you'll only get minimal exposure to tech stocks, as they account for a little under 3% of the portfolio's total holdings. Instead, it's industrials (22%), consumer staples (22%), financials (13%), and materials (12%) that make up the lion's share of the fund.

The ProShares ETF has a higher expense ratio of 0.35%, which is a bit higher than the Vanguard fund, but still fair when compared to other types of funds. In the past five years, it has risen by 35%. And when you include dividends, its total returns are up around 50%. Between this and the Vanguard Growth Fund, you can quickly build up a balanced portfolio that features many top growth stocks and dividend stocks.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, ProShares S&P 500 Dividend Aristocrats ETF, and Vanguard Index Funds-Vanguard Growth ETF. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.