5 Good ETFs to Invest in and Forget

In the ever-changing world of investing, market volatility is one of the few constants. The ups and downs can rattle even experienced investors, often leading to impulsive moves that may derail long-term financial plans.

Many investors are understandably concerned about ongoing stock market volatility, due to trade tensions, rising inflation risks, higher interest rates, and global geopolitical uncertainty. However, economic and corporate fundamentals are expected to adapt to the evolving nature of Trump’s trade policy. Moreover, we can expect some trade deals to materialize over time.

Federal Reserve Chairman Jerome Powell said Wednesday that the central bank will "wait for greater clarity" before making any interest rate changes. This cautious approach comes as President Trump’s newly announced tariffs are expected to lead to "higher inflation and slower growth" — an economic condition known as stagflation.

After this remark, the S&P 500’s recent attempt to rebound— after the earlier bloodbath this month — may not be sustainable. Then, what should be your stance? Should you stay invested in the markets or wait on the sidelines?

For more than 100 years, stocks have almost doubled every eight years irrespective of geopolitical crisis, bubbles, credit defaults, pandemics, currency devaluations and inflation.

If you go by Warren Buffett, “the stock market is a device which transfers money from the impatient to the patient.” Hence, we highlight a few ETFs that can be invested and held in the current volatile market as these products are ageless and great long-term holdings.

ETFs in Focus

Vanguard S&P 500 ETF (VOO) – Zacks Rank #1 (Strong Buy)

The fund VOO tracks the performance of the S&P 500 index, which comprises 500 of the largest publicly traded companies in the United States. It offers exposure to blue-chip stocks across multiple sectors and has historically delivered competitive returns compared to other large-cap benchmarks.

There is no five-year period in history where the S&P failed to give gains, per the MarketWatch article. It has added annualized return of 18.55% in the past five years and 12.46% over the past 10 years.

iShares Core S&P Total U.S. Stock Market ETF ITOT – Zacks Rank #2 (Buy)

Having an exposure to the overall stock market, irrespective of capitalization and style is an intriguing bet over the long term as it offers true diversification. Diversification is a way to win in an unstable market.

The underlying S&P Total Market Index tracks the broad equity market, including large, mid, small, and micro-cap stocks. The fund ITOT charges 3 bps in fees and yields 1.42% annually. The fund gained 18.07% in the past five years and 11.82% over the 10 years.

SPDR Gold Shares GLD – Zacks Rank #3 (Hold)

Gold has traditionally been seen as a safe haven in times of financial uncertainty. The SPDR Gold Shares ETF offers investors an effective way to incorporate gold into their portfolio without the need to physically own the metal.

GLD tracks the price of gold bullion, providing a hedge against inflation and currency devaluation. For investors looking to diversify their holdings and protect against systemic risks, GLD can be a golden choice. The fund added 13.7% in the past five years and 9.7% over the past 10 years.

SPDR S&P Dividend ETF SDY – Zacks Rank #3

Stocks that hike dividends continuously are safe bets. In a volatile market, dividend ETFs normally come to rescue. The hunt for dividends in the equity market is always on, irrespective of how it is behaving. After all, who doesn’t like a steady stream of current income along with capital gains?

The underlying S&P High Yield Dividend Aristocrats Index measures the performance of the highest dividend-yielding S&P Composite 1500 Index constituents that have followed a managed-dividends policy of consistently increasing dividends every year for at least 20 consecutive years. SDY charges 35 bps in fees and yields 2.73% annually. The fund added 14.3% in the past five years and 9.3% over the past 10 years.

Technology Select Sector SPDR ETF XLK – Zacks Rank #1

Technological innovations are part and parcel of the current era. We believe that whether the Fed pauses or cuts rates, tech investing will remain in good shape due to the AI boom and the perception that the era of rock-bottom rates is over. Both tech and moderately higher rates are the new normal, and investors are becoming accustomed to it.

The tech fund XLK charges 8 bps in fees and yields 0.80% annually. The fund gained 21.8% in the past five years and 18.9% over the past 10 years (read: 5 Dividend ETFs Surviving the Tariff Turmoil Past Month).

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This article originally published on Zacks Investment Research (zacks.com).

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