Best Long-Term ETFs to Invest in 2024

Best long-term ETFs to invest in 2024

This article is geared toward analyzing the top long-term ETFs to buy and hold. The Traders Union will also outline some factors to consider when choosing the best long-term ETFs in 2023. Note that when it comes to choosing an online investment, personal research is always encouraged. This article will help you with that.

What are long-term ETFs

ETF is an acronym for Exchange-traded funds. ETF is a pooled investment security or funds traded on exchanges. Typically they are used to track the price of a specific index, sector, commodity, or other assets. When you invest in ETFs, you get to buy and sell them on an exchange the same way a regular stock is traded. To minimize the risk and exposure associated with the financial market, long-term investors generally look for ETFs they can hold for as long as three (3) years to decades. These long-term investments are not subject to any adjustment caused by market fluctuations and can accumulate meaningful returns over time. It is very difficult to beat the index market. Investment icon Warren Buffett knows this, so he famously mandated that 90% of the money he willed his wife be invested in the S&P 500 fund, which has seen a huge return since then. Some ETFs can make a great long-term investment, like the Vanguard Total Stock Market ETF and the SPDR S&P 500 ETF. These ETFs can be used to participate in the U.S. Stock Market.

Not all ETFs are good long-term investments. For example, inverse and leveraged ETFs are designed to be held for only short periods. So it will take a lot of research and advice from a financial advisor to pick ETFs that best fit your financial situation, which may depend on your trading goals, abilities, time, and strategies.

What are the best ETFs to buy and hold in 2024

While there are factors to look out for when choosing an ETF, TU has organized the top 10 ETFs for long-term investors, which are very profitable.

1.iShares Core Growth Allocation ETF (AOR)

iShares Core Growth allocation ETF (AOR) is one of the four iShares core target risk ETFs. The ETF seeks to track the investment result of a proprietary index that provides exposure to equity securities while investing in fixed income. The investment tracks the investment result of the S&P target risk growth index, which comprises a portfolio of 60% allocation to equity and 40% allocation to fixed-income funds designed to represent a target risk growth-allocation approach. When these ETFs invest in these underlying funds, it always seeks a return on investment as their primary goal. The index exposure of the fixed income intends to produce a current income stream, while the equities seek to protect long-term purchasing power. All these also help to avoid excessive volatility of returns in results. The diagram below shows the size of the assets under management.

The allocation of equity to fixed income equals stock and bond, respectively. The management fee is 0.15% annually.

The ETF was launched on November 04, 2008, with a net Assets fund of $2,053,695,151 as of February 15, 2023. Ishares core growth allocation ETF (AOR) is treading at $49.95 per share.

2. iShares Core U.S. Aggregate Bond ETF (AGG)

This ETF seeks to track the investment result of the Bloomberg U.S. Aggregate Bond index, which will measure the performance of the total U.S. investment-grade bond market. It will invest 80% of its assets in the component securities of the underlying index. The ETF was launched on September 22, 2003, and traded on NYSE Arca with a net Assets fund of $85,388,321,729 as of February 15, 2023. iShares Core U.S. Aggregate Bond ETF is trading at $98.12 per share. The management fee is 0.03%.

3. Ishares Core MSCI EAFE ETF (IEFA)

The iShares core MSCI EAFE ETF seeks to track the investment result of the MSCI EAFE IMI index fund. It measures the performance of large, mid, and small capitalization developed market equities, excluding the U.S. and Canada. The fund will generally invest 80% of its assets in the component securities of its primary index and investments. The ETF was launched on October 18, 2012, and it traded on the Cboe BZX Exchange, formerly BATS, with total net assets of $95,793,389,923 as of February 17, 2023. The management fee is 0.07% of your invested capital annually. The ETF is trading at $66.50 per share.

4. Schwab U.S. Dividend Equity ETF (SCHD)

The Dow Jones U.S. Dividend 100TM index's total return is closely followed by the Schwab U.S. Dividend Equity ETF before fees and expenses. The index is intended to measure the performance of high dividend-yielding equities issued by U.S. corporations with a track record of regularly paying dividends, as determined by financial measures and chosen for fundamental strength relative to their peers.

The fund was launched on October 20, 2011. It is traded on the NYSE Arca, Inc. with a net worth of $47,800,486,766.53 as of February 17, 2023.

At least 90% of the fund's net assets will be invested in securities and the underlying index. The yearly management fee is 0.06% of the expense ratio. It is currently trading at $76.91 per share.

5. Schwab U.S Small-Cap ETF (SCHA)

The Schwab U.S. small-cap ETF tracks the total return of the Dow Jones U.S. Small Cap total stock market index as closely as possible before expenses and fees. At least 90% of the fund's net assets will be invested in these equities. The fund was established on November 3, 2009, and as of February 17, 2023, it has total net assets of $14,826,803,654.85. The index name it tracks is the Dow Jones U.S. small-cap total stock market index. It is traded on NYSE Arca, Inc at $45.05 per share. The management fee is 0.04% expense ratio.

6. Vanguard Growth ETF (VUG)

The Vanguard Growth ETF investment seeks to track the performance of the CRSP U.S. Large Cap Growth index, which measures the investment return of large-capitalization growth equities. The index tracked is the CRSP U.S. large growth Index. It was launched on January 26, 2004, with total net assets of $77.32 Billion as of February 17, 2023. It trades at $238.31 per share, and the management fee is 0.04%, traded on the NYSE Arca Inc.

7. Vanguard Total World Stock ETF (VT)

The Vanguard Total World Stock ETF tracks the performance of a benchmark portfolio that measures the investment return of equities in developed and emerging markets worldwide. It was launched on June 24, 2008, with a Total net Assets of $26.592 Billion as of February 21, 2023. It is traded on the NYSE Arca Inc. at $91.92 per share. The expense fee is 0.07% annually.

8. Vanguard S&P 500 ETF (VOO)

The Vanguard S&P 500 ETF seeks to track the performance of the S&P (Standard and poor) 500 Index that measures the investment return of large capitalization stocks. It is traded on NYSE Arca Inc. at $374.22 per share. The inception date for the investment was on September 07, 2010, with total net assets of $279.601 Billion as of February 21, 2023. The expense fee is 0.03%.

9. SPDR S&P 500 ETF (SPY)

The SPDR S&P 500 ETF, often known as the SPY ETF, is an exchange-traded fund (ETF) that tries to match the performance of a benchmark index, the Standard & Poor's 500 indexes, and gauges the investment outcome, which includes a significant cap of U.S. equities. The investment was launched on January 22, 1993, with a Total net Assets of $379.95 Billion as of February 21, 2023. It is trading at $404.37 per share on the NYSE Arca Inc. the expense fee is 0.09%.

10. Invesco S&P 500 Equal Weight ETF (RSP)

The Invesco S&P 500 Equal Weight ETF is built on the S&P 500 Equal Weight Index. The investments seek to track the S&P 500 Equal Weight index's investment outcome before fees and costs. The fund will invest 90% of its total assets in the index's securities. The investment was launched on April 24, 2003, with Total net assets of 36.37 Billion as of February 21, 2023. It is trading at $149.69 per share on the NYSE Arca Inc. The expense fee is 0.20%.

What are the best long-term ETFs to choose?

ETFs are a very good investment for the long term. There are over 5000 ETFs available for investors. It is not easy to keep track of all of them. The competition between the ETFs is positive for investors, as it has reduced the fees associated with ETFs, making them extremely low-cost and efficient securities. The varieties of ETF options out there may be intimidating for many new investors, which is why you need to consider some criteria for choosing which ETF to buy for long-term investment.

1. Strong diversification

One of the top reasons for choosing ETF over stock is its diversification. Diversification involves mixing a wide variety of investments within a portfolio. It helps reduce the risk associated with investing, which is one of the biggest advantages for most ETF investors. Investing in ETFs that track top stock indexes like S&P 500 are practical examples of ETFs, such as the vanguard S&P 500 ETF and the SPDR S&P 500 ETF.

2. Average annual return

Investing in ETFs that have performed well over the years with little or no drawdown can be very profitable. The average return per annum of an ETF can increase your profitability in the markets, so it is crucial to consider it.

3. Low management fee

One of the greatest advantages ETF has over other investment funds is the low management cost. Within different ETFs, there is a difference in management fees. The Vanguard S&P 500 has the lowest management fee. To know the cost of managing an ETF consider looking at the Total Expense ratio, which measures the approximate annual charge you can expect to pay for holding an ETF.

4. Composition of the securities portfolio

The investment portfolio's composition for ETF comprises securities and assets. This makes it tradeable, like the stock market. Some ETFs have more securities and assets than others which is one of the things to look out for when choosing an ETF.

5. Tracking error

ETF seeks to track the performance of an index, and the tracking error assesses how well they do the job. The lower the fund tracking error, the more effectively and consistently it will track its benchmark index. So finding the right ETF with the appropriate tracking error is essential.

How much can I earn on long-term investment in ETF?

The amount one can earn from long-term investment depends on how much you invest in the market and how long you leave it. One of the best growth ETFs and most profitable stocks to buy is the S&P 500, and the Vanguard S&P 500 ETF is meant to track the S&P 500, which is a solid option. For the S&P 500, the return on investment varies annually by around 10%. So if you invest $400 monthly while earning 10% on the average annual return after 40 years, you would have approximately $2.124 million. But you will also need to consider the fee and brokerage commission. For example, the vanguard S&P 500 expense fee is around 0.03% annually, less than other ETFs.

Are long-term ETFs risky?

ETFs are considered low-risk investments because of the long period you will have to buy and hold a particular ETF and their low cost and diversification. But significant risk can still arise from holding ETFs for active trades. The market liquidity risk can also affect an ETF.

Best Brokers to buy and hold ETFs

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