How much can a thousand dollars grow over time? You might be surprised. If invested in an exchange-traded fund (ETF) with a low expense ratio and held for decades, it can turn into quite a lot.
With that much time to work with, two things become critical to consider:
- Even little differences in average annual performance can lead to big differences in the value of your investments.
- Diversification helps eliminate the possibility of one or two companies tanking your plans and keeps the focus on long-term growth without needing to pick winners.
If that sounds simple, it actually is. The ETF marketplace offers dozens of funds that offer access to hundreds if not thousands of companies with fees that could be less than a cup of coffee. That’s how you create long-term wealth without overthinking it.
I have three ETFs that I think fit the bill. One is a broad market ETF. One is more heavily tilted toward growth. One is a bit under-the-radar and invests in an underappreciated area of the market.
Image source: Getty Images.
Vanguard Total Stock Market ETF
This one probably shouldn’t come as a surprise. The Vanguard Total Stock Market ETF (VTI +1.28%) is my favorite core equity ETF because it covers the entire investable U.S. stock universe. It includes large-, mid-, and small-cap stocks across all sectors, making it one of the most diversified equity ETFs in the world. The fact that you can own it for an expense ratio of just 0.03% makes it all the more impressive.
Vanguard Total Stock Market ETF
Today’s Change
(1.28%) $4.68
Current Price
$370.44
Key Data Points
Day’s Range
$368.35 – $370.53
52wk Range
$291.97 – $374.70
Volume
80.4K
Over the long term, I believe it’s important to own U.S. companies of all sizes in your portfolio, not just the S&P 500 (^GSPC +1.08%). As we saw earlier this year, market leadership can change quickly when the economic outlook changes. When the data indicated that it was unlikely the Fed would cut rates in 2026, investors pivoted to value, defensive, and dividend stocks. For a time, tech was one of the worst-performing sectors year to date. Small-caps also performed comparatively well during that value shift.
In short, different segments of the market will go in and out of favor over time. It’s just easier to assume large-cap leadership because that’s what has worked over much of the past decade. But owning everything helps smooth out the ride and capture leadership wherever it can be found.
Invesco Nasdaq-100 ETF
If you’re going to invest for years or decades, you have time to ride the market’s short-term volatility swings in order to maximize your long-term growth potential. The Invesco Nasdaq-100 ETF (QQQM +2.34%) invests in many of the world’s biggest growth innovators and is one of the best options for capturing above-average capital gains over time.
Today’s Change
(2.34%) $6.95
Current Price
$304.52
Key Data Points
Day’s Range
$301.62 – $305.42
52wk Range
$215.55 – $308.21
Volume
3.1M
The Nasdaq-100 often gets branded as a tech proxy. In reality, it’s only about 2/3 tech, but it’s mostly growth stocks. And while growth and tech tend to be more volatile over time, they also offer the greatest growth potential. If you plan on holding your investment forever, it makes a lot of sense to maximize your growth potential while you have time to ride it out.
The Invesco Nasdaq-100 ETF is the better choice compared to the Invesco QQQ ETF (QQQ +2.51%), which tracks the same index, due to the lower expense ratio.
Avantis U.S. Small Cap Value ETF
The small-cap value category may not immediately come to mind when you’re thinking about long-term growth. But it’s actually one of the higher-potential areas of the market if you select your portfolio correctly. It can be dangerous as well, but the Avantis U.S. Small Cap Value ETF (AVUV +1.01%) uses one of the more effective portfolio-construction strategies to improve the chances of success.
American Century ETF Trust – Avantis U.s. Small Cap Value ETF
Today’s Change
(1.01%) $1.22
Current Price
$122.00
Key Data Points
Day’s Range
$121.06 – $122.11
52wk Range
$88.65 – $125.20
Volume
1.2M
This is an actively managed fund that focuses on profitable companies, not the entire space. It examines a range of fundamental measures, including cash flows, revenues, and price-to-book (P/B) ratios, to identify the best combinations of quality and growth potential. This is important in this segment of the U.S. equity market because many small-cap value stocks are value stocks for a reason. Buying the entire segment means owning a lot of weaker, low-potential businesses. This ETF tries to pull the attractively valued success stories out of the mix.
Each of these ETFs can be owned individually, or they can fit well together. The biggest key to success is to remain invested throughout the volatile periods. If you can do that and choose one of these funds to invest in, you’ll be well on your way to building a substantial portfolio over time.
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