If I Were Brand New to Investing, This Is the 1 Surefire ETF I'd Buy and Hold for the Next 30 Years
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.
Missed AI's "Act 1"? Act 2 Could Be 14x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we're only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
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.
