Exchange-traded funds (ETFs) can be a fantastic way to invest. Yet, with thousands of ETFs to choose from, it can be difficult to narrow down which might be the right choice.
In this article, I'll cover two very different -- but excellent -- ETFs. Let's get started.
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Vanguard Growth ETF
The first unstoppable Vanguard ETF I want to cover is the Vanguard Growth ETF (VUG -1.43%).
I've always leaned toward growth stocks over value stocks, so it's no surprise I'm fond of this fund.
In a nutshell, it zeroes in on the fastest-growing stocks within the U.S. equity market. It should come as no surprise that many of the top holdings are the big names you might expect: Apple, Microsoft, Nvidia, Amazon, Meta Platforms.
| Company | Percentage of Holdings |
| Apple | 13% |
| Microsoft | 12.1% |
| Nvidia | 10.9% |
| Alphabet | 6.8% |
| Amazon | 4.6% |
| Meta Platforms | 4.5% |
| Eli Lilly | 3.2% |
| Tesla | 2.3% |
| Visa | 1.7% |
| Mastercard | 1.6% |
However, this fund is more than just a big tech fund. You'll also find Costco, Eli Lilly, and Mastercard.
What you won't find much of are dividend payments. Since the ETF is heavy on growth stocks, many of its core holdings pay little or nothing in dividends. Therefore, the fund has a meager 0.5% dividend yield as of this writing.
But it has an excellent performance history. Over the last five years, the Vanguard Growth ETF has generated a total return of nearly 137% -- meaning a $10,000 investment made in late 2019 would be worth almost $24,000 as of this writing.
The compound annual growth rate (CAGR) over the same five-year period is 18.8%, better than the S&P 500's 15.8%.
Topping it all off, this fund charges low fees with an expense ratio of just 0.04% -- among the lowest for any ETF. That means you pay only $4 a year in fees for every $10,000 invested in this excellent ETF.
Vanguard U.S. Quality Factor ETF
My second unstoppable Vanguard fund to buy and hold is the Vanguard U.S. Quality Factor ETF (VFQY -1.00%).
I'm keen on growth stocks, but I'm not blind to the fact that for many other people, value investing is their preferred method. And for them, this Vanguard fund is a great find.
The Vanguard U.S. Quality Factor ETF is actively managed, something of a rarity for the company. However, it still has a modest expense ratio of 0.13%, meaning investors pay only $13 a year in fees for every $10,000 invested.
The fund relies on a quantitative methodology for selecting and weighting its holdings. As a result, they are diverse and ever-changing. As of this writing, it counts Nike, Target, 3M, and Apple among its top holdings -- calculating that those stocks are a good value when compared to their rivals.
| Company | Percentage of Holdings |
| Nike | 2.2% |
| 3M | 2.2% |
| Gilead Sciences | 2.1% |
| Apple | 2% |
| Target | 2% |
| Qualcomm | 1.9% |
| Walmart | 1.8% |
| TJX Companies | 1.8% |
| lululemon athletica | 1.8% |
| Merck | 1.8% |
This ETF has trailed the benchmark S&P 500 index over the last five years. Since 2019, it has generated a return of 94% -- meaning a $10,000 investment made in 2019 would be worth about $19,500 as of this writing. The fund's 14.2% CAGR trails the S&P 500's 15.8% over the same period.
However, the ETF's recent performance isn't terrible, and it shouldn't scare off prospective investors. Growth stocks have outperformed value stocks in recent years, and this fund is focused on identifying and owning stocks with strong value characteristics.
Each of these Vanguard funds is worth buying and holding for the long term, but for very different reasons. Growth-focused investors would be wise to consider the Vanguard Growth ETF, while value investors should give the Vanguard U.S. Quality Factor ETF a closer look.
