There are a lot of exchange-traded funds (ETFs) you can hold in your portfolio to get exposure to various different sectors of the economy. But rather than trying to focus on different areas and having to constantly re-evaluate which stocks to invest in, a much simpler and more effective strategy can be to simply track the S&P 500.
An ETF which can be highly effective for Canadian investors in that regard is the Vanguard S&P 500 Index ETF (TSX:VFV). It has a low management expense ratio of 0.09% and gives investors access to U.S. stocks on the S&P 500. The top holdings in the fund include Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Nvidia (NASDAQ:NVDA). By having exposure to the top stocks in the U.S. while being able to easily invest in this TSX-listed fund, Canadian investors can have an ideal investment to put into their tax-free savings account (TFSA) for the long haul.
Since the start of the year, the Vanguard S&P 500 ETF has risen by more than 30%. And in five years, it has doubled in value. The Vanguard fund is an excellent example of a buy-and-forget investment and can be a cornerstone of any portfolio.
While there is the danger that high stock valuations could lead to underwhelming returns for the S&P 500 in the near term and possibly even a correction, as long as you’re willing to hang on for more than just a couple of years, this can be one of the best ETFs to put into your TFSA right now.
