The benchmark Standard & Poor's 500 Index has historically returned roughly 10% annually, so investing in significant companies has been a good bet. Without the inconvenience of buying and selling individual stocks, you may acquire exposure to large-cap stocks by investing in an exchange-traded fund (ETF).

What's A Large-Cap ETF?

An exchange-traded fund (ETF) that invests in the market's largest firms, defined as those with a market capitalization of at least $15 billion and often $20 billion, is called a large-cap ETF. Investing in large-caps ETFs is a terrific way to gain exposure to the stock of some of the world's most successful firms without having to conduct your research and choose winners.

The large-cap market includes lesser-known stores and industry giants like Amazon, Apple, and Microsoft. As a result, the 100-fold difference in value between the most significant and most minor large-cap corporations is still being determined.

How Do Large-Cap Growth ETFs Operate?

Rising Majority Stocks Exchange-Traded Funds (ETFs) follow an index that uses several criteria to identify firms with strong potential for development. Depending on the index, earnings growth, sales growth, and pricing increases might play a role.

Several ETFs also evaluate value criteria when looking for high-growth firms or growth companies with a reasonable price tag. Our selected ETFs represent a range of growth investment styles.

The resulting list of funds may have higher than average P/E ratios. The top three to five corporations comprise a disproportionately large portion of some funds' holdings, while others are more diversified.

3 Best ETFs For Long-Term Investors

Index-based exchange-traded funds (ETFs) may be the appropriate vehicle for you if you are an investor who prefers the buy-and-hold approach of allowing thoroughly screened investments to amass considerable returns over time.

Warren Buffett, a legendary investor, is so confident in the performance of index funds that he famously instructed his wife to invest 90% of his estate in an S&P 500 index fund. You need not follow Buffett's lead and invest everything in an index fund.

Vanguard's Total Stock Market Exchange Traded Fund

You can invest in this fund if you are unsure which index to follow or want to diversify your portfolio across industries and market caps. As the name suggests, the Total Stock Market ETF invests in the entirety of the U.S. stock market by mirroring the CRSP U.S. Total Stock Market Index.

The equities in VTI, a balanced fund, are evenly distributed across market capitalizations. The expense ratio of VTI, which is relatively low, is evidence of the fund's outstanding efficiency. Plus, an institution's financial assets are staggering, with over $271 billion in AUM.

The SPDR S&P 500 Exchange Traded Fund (SPY)

This well-established ETF was the first of its kind and continues to get significant interest from both short-term traders and long-term holders. The fund attempts to replicate the performance of the S&P 500 Index, an index composed of 500 of the largest publicly traded companies in the United States.

SPDR 500 ETF is a unit investment trust (UIT). Hence its cash dividends are distributed to shareholders and not reinvested. Due to this nitpick, the fund's returns might be somewhat different from the index it tracks.

iShares Core MSCI EAFE ETF

The stocks of developed markets in Europe and Asia are included in IEFA's coverage, but U.S. and Canadian stocks are not. The MSCI EAFE is the standard against which all other international stock markets are measured.

In addition, unlike competing funds, it incorporates small-cap companies at a market-average weighting. The two most significant holdings in the fund are in Japan and the United Kingdom.

If you're looking for exposure to markets outside of North America, go no further than IEFA, a well-diversified fund with approximately 3,000 shares and minimal ownership fees.

Are Large-Cap ETFs A Good Investment?

Even if you're an experienced investor, you should start with large-cap ETFs as an excellent location to learn the ropes. Large-cap ETFs often provide higher potential returns over the long run.

Large-cap stock portfolios, like the S&P 500, have earned returns of roughly 10% annually over extended periods, but returns are far more erratic than that. Even if a 30% gain in a year would be fantastic, losses of the same magnitude are not unheard of.

That's why buy-and-holding is crucial if you want to reap the rewards that large caps may provide.