The earnings season has been mixed, with concerns over tariffs and market volatility. If you’re someone who does not enjoy diving into financial statements or hearing earnings calls, consider investing in exchange-traded funds (ETFs). This way, you get to own the best stocks in the industry with a single investment and do not have to worry about tracking the market every day. ETFs are low-cost, offer optimal diversification, and generate steady income. There are thousands of ETFs to choose from, and not all may be suitable for you. If you’re looking to start with $1,000, here are the three best ETFs to buy.
Vanguard S&P 500 ETF
One of the most popular ETFs by Vanguard, the Vanguard S&P 500 ETF (NYSE: VOO | VOO Price Prediction) mirrors the S&P 500 and holds the best 505 stocks in the country. It attracts investors for diversification, low cost, and impressive returns. The fund focuses on large-cap companies and is tech-heavy, but it also holds some of the best blue-chip companies. It has an expense ratio of 0.03% and the sector allocation includes:
- Information Technology: 33.10%
- Financials: 13.90%
- Consumer Discretionary: 10.40%
- Communication Services: 9.80%
It holds the Magnificent Seven in the top 10 with the highest weightage on Nvidia. Its top 10 holdings make up 36% of the portfolio. The fund has generated 3-year returns of 17.06% and a 5-year return of 15.84%. VOO trades for $584.54 and is up 8.76% year-to-date. The NAV has jumped 88% in five years.
While the top 10 are tech-heavy, the fund also includes other well-established companies like Coca-Cola, Visa Inc., and Johnson & Johnson. Its long-term returns have been impressive, and its 30-day SEC yield is 1.17%. VOO is one of the most reliable and diversified ETFs to own. It will generate passive income and offer capital appreciation over the long term.
Vanguard Dividend Appreciation ETF
Another excellent ETF from Vanguard, the Vanguard Dividend Appreciation ETF (NYSEARCA:VIG) is ideal for passive income investors. The fund tracks the performance of the S&P U.S. Dividend Growers index.
It holds stocks of the top dividend-paying companies that have a record of increasing their annual payouts. In order to be a part of the ETF, the companies must have increased the annual dividend for 10 consecutive years. Exchanging hands for $206.72, VIG is up 6.07% year-to-date.
The ETF is tech-focused and holds 337 stocks. It has net assets of $108.8 billion, and most of its stocks are large-cap stocks with a high concentration on tech companies. Its sector allocation includes:
- Information Technology: 26.10%
- Financials: 22.70%
- Healthcare: 15.10%
- Industrials: 11.20%
It has a dividend yield of 1.65%. The ETF focuses on dividend growth over high payouts. Most of the companies in the fund are growth-focused, which also offer capital appreciation. It has an expense ratio of 0.05% and its 3-year returns are 12.50% while its 5-year returns are 12.93%. It holds some of the fundamentally strong companies like Broadcom, Eli Lilly, Visa Inc., Chevron, and Apple. None of the stocks has a weightage higher than 6%.
If you’re looking for stability during uncertain times, this is an ETF that wouldn’t disappoint.
Schwab U.S. Dividend Equity ETF
Another dividend ETF, the Schwab U.S. Dividend Equity ETF (NYSE: SCHD) tracks the performance of the Dow Jones U.S. Dividend 100 index and holds 103 high-yield U.S. dividend stocks. It also invests in companies that have paid dividends for at least 10 consecutive years and can sustain them.
SCHD is exchanging hands for $26.79 and has remained flat in 2025. The fund is not tech-focused and invests only 9% in the sector. Its sector allocation includes:
- Energy: 19.23%
- Consumer Staples: 18.81%
- Healthcare: 15.53%
- Industrials: 12.50%
Some of the top holdings include PepsiCo, Chevron, AbbVie, and Cisco. These are strong dividend-paying companies that have the ability to raise dividends in the coming years.
It has an expense ratio of 0.06% and a 30-day SEC yield of 3.85%, higher than the average S&P 500 yield of 1.3%. SCHD had generated a 3-year return of 6.06% and a 5-year return of 11.72%. $10,000 invested in the fund in 2015 would be worth $30,258 today. It is a low-risk, low-cost, highly diversified fund that ensures steady dividend income.
Top Gaining Stocks
Top Losing Stocks