What might the right index funds look like?<\/p>\n
These three index funds represent a balance between growth<\/a> and dividend stocks<\/a> across various market sectors<\/a>. By dollar-cost averaging<\/a> savings into them, you can enjoy steady returns that add up to life-changing wealth over the long haul.<\/p>\n Image source: Getty Images.<\/p>\n 1. Vanguard S&P 500 ETF<\/p>\n It’s hard to go wrong with an S&P 500 index fund as a cornerstone for your retirement portfolio. Arguably the most famous stock market index<\/a>, the S&P 500 consists of 500 prominent U.S. companies and has generated annualized returns of approximately 8%<\/a> since 1928. The Vanguard S&P 500 ETF (VOO<\/a> 1.63%) has become one of the most popular S&P 500 index funds since its 2010 inception.<\/p>\n Today’s Change<\/p>\n (-1.63%) $-10.23<\/p>\n Current Price<\/p>\n $617.99<\/p>\n Key Data Points<\/p>\n Market Cap<\/p>\n $0B<\/p>\n Day’s Range<\/p>\n $616.51 – $626.02<\/p>\n 52wk Range<\/p>\n $442.80 – $634.13<\/p>\n Volume<\/p>\n 13M<\/p>\n Avg Vol<\/p>\n 0<\/p>\n Gross Margin<\/p>\n 0.00%<\/p>\n Dividend Yield<\/p>\n N\/A<\/p>\n Investing in the S&P 500 gives investors exposure to all major market sectors. However, technology currently accounts for almost 35% of the index, driven by the immense success and growth of the “Magnificent Seven” stocks<\/a>. The S&P 500 is market-cap-weighted<\/a>, so the stocks that thrive will account for a larger portion of the index, a methodology that has contributed to its long-standing success.<\/p>\n Additionally, investors will appreciate the Vanguard’s S&P 500 ETF’s low expense ratio<\/a> of just 0.03%, or $0.30 on a $1,000 investment. Lastly, the fund has a minimum investment of just $1, so it’s very accessible to investors of any budget. Add in the trusted Vanguard name, and this S&P 500 index fund is a no-brainer for any retirement portfolio.<\/p>\n 2. Invesco QQQ ETF<\/p>\n As the world increasingly relies on technology, adding a tech-focused index fund to your retirement portfolio can be a wise move. The Invesco QQQ ETF (QQQ<\/a> 2.04%) tracks the Nasdaq-100 index, a group of the 100 largest non-financial companies trading on the Nasdaq stock exchange<\/a>.<\/p>\n Today’s Change<\/p>\n (-2.04%) $-12.68<\/p>\n Current Price<\/p>\n $608.40<\/p>\n Key Data Points<\/p>\n Market Cap<\/p>\n $0B<\/p>\n Day’s Range<\/p>\n $606.08 – $618.12<\/p>\n 52wk Range<\/p>\n $402.39 – $637.01<\/p>\n Volume<\/p>\n 71M<\/p>\n Avg Vol<\/p>\n 0<\/p>\n Gross Margin<\/p>\n 0.00%<\/p>\n Dividend Yield<\/p>\n N\/A<\/p>\n That means outsize technology exposure. The tech sector accounts for 64% of the Invesco QQQ, followed by just over 18% in consumer discretionary, and single-digit weightings across the other sectors. The Magnificent Seven stocks have a heavy presence in the fund’s top holdings, with Broadcom and Netflix rounding out the top 10.<\/p>\n Technology stocks tend to be more volatile, but can produce tremendous returns over time. The Invesco QQQ has outperformed the S&P 500 over its lifetime, but has endured multiple declines of more than 60% from its high. The Invesco QQQ ETF can add growth upside to your retirement portfolio, so long as you’re comfortable with the extra volatility that can accompany it.<\/p>\n 3. Schwab U.S. Dividend Equity ETF<\/p>\n Diversification is crucial to a retirement portfolio, so it’s wise to dial back some of that technology exposure. The Schwab U.S. Dividend Equity ETF (SCHD<\/a> +0.11%) is perfect for that. The fund tracks the Dow Jones U.S. Dividend 100 Index, which comes with just single-digit (8.3%) exposure to technology stocks.<\/p>\n Schwab U.S. Dividend Equity ETF<\/p>\n Today’s Change<\/p>\n (0.11%) $0.03<\/p>\n Current Price<\/p>\n $27.22<\/p>\n Key Data Points<\/p>\n Market Cap<\/p>\n $0B<\/p>\n Day’s Range<\/p>\n $27.19 – $27.49<\/p>\n 52wk Range<\/p>\n $23.87 – $29.72<\/p>\n Volume<\/p>\n 22M<\/p>\n Avg Vol<\/p>\n 0<\/p>\n Gross Margin<\/p>\n 0.00%<\/p>\n Dividend Yield<\/p>\n N\/A<\/p>\n Instead, the fund leans more heavily into sectors like energy, consumer staples, healthcare, and industrials, which have lighter weightings in the S&P 500 index. The Schwab U.S. Dividend Equity ETF’s top holdings include prominent blue chip dividend stocks<\/a> such as Cisco Systems, AbbVie, Coca-Cola, Lockheed Martin, Chevron, and Verizon Communications.<\/p>\n<\/p>\n
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