There are times when the best investment strategy is the simplest one. With so many stock picks, strategies, and opinions flying around, it’s easy to get overwhelmed. But what if one exchange-traded fund (ETF) could give you diversified exposure to the entire U.S. market with one click? That’s exactly what the TSX-listed Vanguard S&P 500 Index ETF (TSX:VFV) offers.
It tracks the S&P 500, meaning you instantly get access to top U.S. stocks like Apple, Microsoft, and NVIDIA without buying them individually. More importantly, this ETF has a solid track record of delivering strong returns over the years with surprisingly low fees. Whether you’re building wealth for retirement, saving for a big goal, or just want a low-maintenance investment, VFV could be a great pick for your portfolio.
In this article, I’ll explain why the VFV ETF could be one of the smartest long-term holdings for investors who prefer simplicity with solid returns.
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Built-in exposure to 500 of America’s most powerful stocks
As I mentioned above, the VFV ETF tracks the S&P 500 Index, which means it automatically mirrors the performance of the 500 largest publicly traded companies in the U.S. That includes industry giants like Apple, Microsoft, NVIDIA, Alphabet, Amazon, and Tesla – stocks that have shaped global markets over the last decade.
Together, its top 10 holdings make up over 40% of VFV’s total value, while the rest is spread across hundreds of other well-established names. What’s comforting here is that you’re not betting on one or two stocks or sectors. Instead, you’re tapping into a broad slice of the U.S. economy, including tech, financials, health care, consumer goods, and more.
This diversification is exactly what long-term investors love. Instead of trying to time markets or chase hot growth stocks, VFV gives you exposure to well-established companies with deep moats, global reach, and strong balance sheets – all in one ETF.
Low fees mean more of your money stays invested
When investing in ETFs, one of the biggest silent killers of your long-term returns could be high fees. And that’s another reason VFV works so well. The ETF charges a management expense ratio (MER) of just 0.09%, which means for every $1,000 you invest, only $0.90 goes toward fees each year. The rest continues to work for you.
If we compare that with actively managed funds or even some mutual funds, the gap can grow quickly over time. Lower fees mean more of your returns get reinvested year after year, boosting your compounding potential in the long run.
Strong long-term performance that speaks for itself
Another key reason to pick VFV ETF is its impressive performance over the last decade. Since its launch in 2012, the ETF has delivered an annualized return of nearly 17.6% based on market price.
Even through turbulent periods like the 2022 market pullback, VFV bounced back strongly, posting 23% returns in 2023 and a remarkable 35% in 2024. Its long-term resilience is exactly what makes it such a compelling pick for buy-and-hold investors.
And while short-term dips can happen, the VFV ETF has only ended one calendar year in the red over the last 10. That’s a strong track record of stability, especially for an equity-focused ETF.
