ETF investing is the safest and easiest investing strategy for most long-term investors. With this strategy, you won't buy the wrong stock if you buy all the stocks. As Jack Bogle, the founder of Vanguard, once said: "Don't look for the needle in the haystack. Just buy the haystack."
The Only 4 ETFs You'll Ever Need
ETF investing is the safest and easiest investing strategy for most long-term investors. With this strategy, you won't buy the wrong stock if you buy all the stocks.
As Jack Bogle, the founder of Vanguard, once said: "Don't look for the needle in the haystack. Just buy the haystack."
This guide covers the 4 ETFs that can help you outperform most investors:
- S&P 500 ETF — The gold standard
- All World ETF — Global diversification
- US Growth ETF — Higher potential returns
- Dividend ETF — Passive income focus
This ETF tracks the top 500 companies in the US and is considered the gold standard among ETFs.
- Outperforms 95% of funds out there
- Has the seal of approval from Warren Buffett himself
The S&P 500 has strict criteria:
- Companies must be profitable over the last few quarters to join
- Companies that underperform for too long get kicked out
- You're always investing in the top-performing companies at any given time
- Nvidia
- Microsoft
- Apple
- Amazon
- META
- And more familiar names
- Information Technology: 32%
- Financials: 14%
- Consumer Discretionary: 10%
- Other sectors make up the rest
The S&P 500 has delivered an average annual return of around 10% — but there's a big caveat.
5-Year Investment Period (1995-2025):
- Returns ranged from -6% to +24% annually
- High volatility risk
15-Year Investment Period:
- Returns ranged from 4% to 15% annually
- Much narrower range
Key takeaway: The longer you stay invested, the closer you'll get to the average 10% return.
CSPX (iShares Core S&P 500 UCITS ETF)
- Expense Ratio: 0.07%
- For every $1,000 invested, you pay only $0.70 in fees
- Accumulating — Reinvests dividends for compounding
- Ireland-domiciled — Only 15% dividend withholding tax (vs 30% for US-domiciled ETFs like VOO, SPY, or S27)
SPYL (SPDR S&P 500 UCITS ETF)
- Expense Ratio: 0.03% (even lower)
- May require extra steps to buy on some brokers like Interactive Brokers
- Could incur higher commission if bought via normal method
Even though the S&P 500 is a strong index, the world is a very big place full of investment opportunities beyond just the US.
- Country concentration risk — If the US economy faces challenges, your portfolio could take a hit
- There have been many periods when international markets outperformed the US
- Cast a wider net by investing in top companies from around the globe
VWRA (Vanguard FTSE All-World UCITS ETF)
- Expense Ratio: 0.22%
- Holdings: Over 3,600 companies
FWRA (Invesco FTSE All-World UCITS ETF)
- Expense Ratio: 0.15% (slightly lower)
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For investors who want higher potential returns and have a bigger risk appetite.
The most well-known option, tracking the Nasdaq-100 index.
What's in the Nasdaq-100:
- Top 100 non-financial companies
- Many tech giants driving innovation and growth
- Also includes non-tech companies like Costco, PepsiCo, and Starbucks
Sector Breakdown:
- Technology: ~57%
- Consumer Discretionary: ~19.7% (includes Amazon, Tesla, Netflix)
Many names in this ETF are fast-growing companies with potential for higher returns. However, they also come with higher volatility.
- During tough times, QQQ can fall a lot more than other ETFs
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For investors who want a steady stream of income coming in every few months.
- Invest in well-established companies with strong history of paying regular dividends
- Companies tend to be more mature and financially stable
- Lower risk compared to growth-focused ETFs
- Good for investors who want passive income and more stability
SCHD (Schwab U.S. Dividend Equity ETF)
- Expense Ratio: 0.06%
- Holdings: Top 101 high-quality US dividend-paying companies
Selection Criteria:
- Dividend yield
- Dividend growth
- Financial strength metrics
It depends on your investment objective and risk appetite.
Recommendation: All World ETFs (VWRA or FWRA)
- Greatest diversification
- Good balance between risk and reward
Recommendation: Growth ETFs (QQQ, QQQM, or SCHG)
- Potential for higher returns
- Can handle more volatility over long time horizon
Recommendation: S&P 500 ETF (CSPX or SPYL)
- Still want decent potential returns
- Prefer lower volatility than growth ETFs
Recommendation: Dividend ETFs (VHYD)
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1. S&P 500 ETF
- Best options: CSPX (0.07%) or SPYL (0.03%)
- Top 500 US companies
- ~10% average annual return
- Self-cleansing mechanism keeps only top performers
2. All World ETF
- Best options: VWRA (0.22%) or FWRA (0.15%)
- 2,400-3,600 companies globally
- ~9% average annual return
- Best diversification across countries
3. US Growth ETF
- Best options: SCHG (0.04%), QQQM (0.15%), or QQQ
- Tech-heavy, fast-growing companies
- Higher potential returns but more volatility
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This is not financial advice and is for educational purposes only.
Best ETFs For First Time Investors
Both ETFs deliver similar returns — you won't go wrong with either choice.
- US: 62%
- Japan: 6%
- UK: 3.6%
- Other countries make up the rest
- Apple
- Microsoft
- Nvidia
- And thousands more companies globally
- All World ETF: ~9% annualised return
- S&P 500: ~10.7% annualised return
Even though this ETF is much more diversified globally, its long-term return isn't far behind the S&P 500.
If you want to diversify beyond the US while still capturing growth from top companies worldwide, this is a smart choice.
- You need to be mentally prepared for big swings — both up and down
QQQM (Invesco Nasdaq-100 ETF)
- Expense Ratio: 0.15% (lower than QQQ)
- Same Nasdaq-100 exposure
- More cost-efficient for long-term investors
SCHG (Schwab U.S. Large-Cap Growth ETF)
- Expense Ratio: 0.04% (ultra-low)
- Holdings: Over 200 companies
- Tracks large-cap growth stocks across both Nasdaq and NYSE
- Includes companies not in Nasdaq-100: Visa, Eli Lilly, Home Depot
SCHG Selection Criteria:
- Projected P/E ratio
- Projected earnings growth
- Price-to-book value
- Dividend yield
- Trailing revenue and earnings growth
Even though SCHG holds more companies, its performance has historically been quite comparable to QQQ.
If you're looking for a growth-focused ETF with broader exposure and ultra-low fees — without sacrificing returns — SCHG is a compelling alternative for long-term investors.
- Coca-Cola
- Pfizer
- Verizon
- Companies known for steady cash flow and consistent payouts
Tax Warning: Because SCHD is domiciled in the US, non-US residents will be slapped with a 30% dividend withholding tax, which can significantly reduce overall returns.
VHYD (Vanguard FTSE All-World High Dividend Yield UCITS ETF)
- Expense Ratio: 0.29%
- Ireland-domiciled — Only 15% dividend withholding tax
- Holdings: 2,000+ large and mid-cap companies globally
Geographic Coverage:
- US
- Japan
- UK
- Switzerland
- Canada
- And more countries
VHYD is a great option if you want to earn dividends while reducing your geographic concentration risk.
- More stable, mature companies
- Tax-efficient for non-US residents
4. Dividend ETF
- Best options: VHYD (0.29%) or SCHD (0.06%)
- Mature, stable companies with regular payouts
- VHYD is more tax-efficient for non-US residents
- Best for passive income seekers
- Beginners: VWRA or FWRA (All World)
- Young investors with high risk appetite: QQQ, QQQM, or SCHG (Growth)
- Risk-averse investors: CSPX or SPYL (S&P 500)
- Near retirement / income seekers: VHYD (Dividend)
- Ireland-domiciled ETFs: 15% dividend withholding tax
- US-domiciled ETFs: 30% dividend withholding tax
For non-US residents, Ireland-domiciled ETFs are generally more tax-efficient.
