Markets will remain volatile until the Iran situation cools. Unfortunately, no one knows when that will happen. In this situation, you can either sit in cash, go short the market, or put your money to work in safe ETFs (exchange-traded funds), especially those that invest like billionaire Warren Buffett.
There are many safe ETFs to choose from. So many, in fact, that it can create analysis paralysis. Don’t let that happen to you. Here are three of the top ETFs to own if stable growth with a reliable yield is your first priority.
Safe ETFs to Buy: The Vanguard S&P 500 ETF
"Over the years, I’ve often been asked for investment advice,” Buffett wrote in a 2016 shareholder letter. “My regular recommendation has been a low-cost S&P 500 index fund.”
With that, Buffett has named the Vanguard S&P 500 ETF (NYSEARCA: VOO) as one way to invest. What makes the VOO ETF the most attractive is that it measures the performance of the S&P 500 and includes both value stocks and growth stocks from multiple market sectors. In fact, its holdings include some of the most widely held stocks, including Nvidia (NASDAQ: NVDA), Microsoft (NASDAQ: MSFT), Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL) and Berkshire Hathaway (NYSE: BRK.B).
It offers a low-cost way to safely diversify by tracking the largest companies, making it an ideal set-it-and-forget-it trade. In addition, with an expense ratio of 0.03%, the ETF also pays a quarterly yield. On December 24, it paid a dividend of just over $1.771. Before that, it paid a dividend of $1.74 on October 1. Before that, it paid a dividend of just over $1.7447 on July 2.
Safe ETFs to Buy: The VanEck Morningstar Wide Moat ETF
If you follow Warren Buffett, you know he likes companies with a wide economic moat. In fact, if you want to invest in companies attractive to the billionaire, make sure they are:
- Simple companies that are easy to understand
- Companies with predictable and proven earnings
- Companies that can be bought at a reasonable price
- Companies with "economic moat," or a unique advantage over their competition.
With an expense ratio of 0.47%, the VanEck Morningstar Wide Moat ETF (BATS: MOAT) tracks the performance of companies with sustainable competitive advantages. That includes Estee Lauder (NYSE: EL), Teradyne (NASDAQ: TER), Boeing (NYSE: BA), Alphabet, Nike (NYSE: NKE), and NXP Semiconductors (NASDAQ: NXPI).
The MOAT ETF also yields 1.29% and pays a yearly dividend. On December 24, it paid out a dividend of $1.2675. On December 22, 2023, it paid out a dividend of $0.7285.
Safe ETFs to Buy: The Schwab US Dividend Equity ETF
There's also the Schwab US Dividend Equity ETF (NYSEARCA: SCHD), which tracks the performance of 100 high-yielding dividend stocks chosen by yield and five-year dividend growth rates.
With an expense ratio of 0.06%, the ETF tracks the total return of the Dow Jones U.S. Dividend Index. It also yields 3.37%, which is about three times the S&P 500's dividend yield, and has holdings in names such as: Amgen (NASDAQ: AMGN), AbbVie (NYSE: ABBV), Home Depot (NYSE: HD), Cisco Systems (NASDAQ; CSCO), Broadcom (NASDAQ: AVGO), Chevron (NYSE: CVX), UPS (NYSE: UPS), and Coca-Cola (NYSE: KO). Its last dividend of just over 27 cents was paid on December 15. Before that, it paid just over 26 cents on September 29.
Control What You Can Control
While geopolitical tensions and market volatility may keep investors on edge, the key to long-term success is staying invested in high-quality assets. ETFs like the Vanguard S&P 500 ETF, VanEck Morningstar Wide Moat ETF, and Schwab US Dividend Equity ETF provide diversification, strong underlying companies, and reliable income streams—all qualities that can help weather uncertain markets.
Instead of trying to time every headline, investors can focus on disciplined, long-term strategies using funds like these to build resilience and stability in their portfolios.
