It seems like the S&P 500 has already gone through a full market cycle in 2026. Growth showed signs of slowing, and then the Iran war sent the index 9% lower. Once hope for a de-escalation spread in April, it was back to new all-time highs. But the conflict hasn’t ended, and we’ve got much higher inflation to deal with now. There are a lot of variables that could still send U.S. stocks in either direction.
But if your time frame is years or decades instead of months, all this matters a lot less. Looking through a long-term lens, this is part of the normal volatility that occurs when investing in equities. If you have a lot of time left to invest, you can focus instead on choosing the right ETF ideal for long-term wealth creation instead of the headlines of the moment.
There are a lot of good ones out there to choose from today. These three are favorites of mine because they use smart selection strategies, keep costs incredibly low, and offer broad market diversification.
Image source: Getty Images.
Key takeaways
- These three ETFs have different target markets. One invests in U.S. stocks, one invests in U.S. dividend stocks, and one is perhaps the ultimate all-in-one stock ETF.
- Each offers unique stock market exposure, which makes them perfect to be used collectively as well.
- Over the long term, stocks provide the best returns, but it’s important to ride out short-term volatility along the way.
- Actively trading these ETFs usually results in buying and selling at the wrong time. This tends to negatively impact long-term returns.
1. Vanguard S&P 500 ETF
The Vanguard S&P 500 ETF (VOO 0.03%) is probably the most obvious choice to make a list like this, but that doesn’t make it any less effective. By focusing on 500 of the largest companies in the United States, it gives a great cross-section of the entire U.S. economy. By focusing on this, you take advantage of the country’s long-term growth narrative instead of trying to pick what’s hot at any given moment.
Today’s Change
(-0.03%) $-0.19
Current Price
$656.23
Key Data Points
Day’s Range
$655.37 – $656.67
52wk Range
$497.76 – $656.82
Volume
34K
If there’s any downside, it’s that the Vanguard S&P 500 ETF omits the mid-cap and small-cap markets. It’s a relatively small but still important segment of the market that can account for up to 25% of total U.S. stock market capitalization. Choosing the Vanguard Total Stock Market ETF (VTI +0.08%) would solve this issue, but either will work very effectively for a small investment held for decades.
2. Schwab U.S. Dividend Equity ETF
If you’re building your portfolio around a core U.S. stock market position, the Schwab U.S. Dividend Equity ETF (SCHD 0.70%) is one of the best complements you’ll find. It scours the dividend-paying U.S. stock universe to find those companies with the best combination of balance sheet quality, long-term dividend history, and high yield.
In today’s tech-driven market, dividend income is an underappreciated component of total return. This ETF’s 3.4% yield is one of the most durable high yields in the marketplace.
Schwab U.S. Dividend Equity ETF
Today’s Change
(-0.70%) $-0.22
Current Price
$31.20
Key Data Points
Day’s Range
$31.14 – $31.55
52wk Range
$25.41 – $31.95
Volume
592K
3. Vanguard Total World Stock ETF
If owning 10,000 different stocks within a single fund has been a goal of yours, the Vanguard Total World Stock ETF (VT +0.80%) is the one for you. This fund is very roughly a combination of the Vanguard Total Stock Market ETF and the Vanguard Total International Stock ETF. It maintains a 60% allocation to U.S. stocks, 30% developed-market stocks, and 10% emerging markets. Some might not like the heavier allocation to international stocks, but this mix is solid for capturing the global economic growth story.
ETF comparison
| ETF | Ticker | Expense Ratio | Yield | AUM | Key Strength |
|---|---|---|---|---|---|
| Vanguard S&P 500 ETF | VOO | 0.03% | 1.2% | $904B | U.S. large-cap core |
| Schwab U.S. Dividend Equity ETF | SCHD | 0.06% | 3.4% | $88B | Dividend income + quality |
| Vanguard Total World Stock ETF | VT | 0.06% | 1.7% | $70B | Global diversification |
Data sources: Vanguard, Schwab.
When looking for a great long-term ETF, the focus should be on quality, diversification, and low costs. Each of these funds delivers just that. Whether you have $1,000 to put to work or something larger, these ETFs are great options.