3 ETFs Every Millennial Should Buy and Hold Forever

Millennial investors still have time on their side and should strive to grow their wealth by placing a much heavier weight on stocks over bonds. Of course, there are exceptions, including those who expect a big down payment on hefty tuition expenses to arise at some point in the next three years. For the rest of the liquid assets, the following exchange-traded funds (ETFs) make sense to hold for the long haul. If not forever, for the next three to five decades for the capital appreciation.

While there will be more than a fair share of down years (if we have two consecutive years of over 20% gains, you can be sure that similar losing streaks will happen at some point over the next few decades), they’re likely to be heavily outweighed by really good years.

So, if you’ve got a multi-decade horizon and are ready to make up for lost time as a Millennial investor, stocks are the top asset class to stick with. Here are three set-and-forget ETFs to help you on your journey to (early) retirement.

Vanguard Growth ETF (VUG)

First, we have a very low-cost (0.04% expense ratio) growth-focused ETF in the Vanguard Growth ETF (NYSEARCA:VUG). It’s a blue-chip growth ETF with a heavier emphasis on larger-cap companies. Underneath the hood, you’ll find substantial overlap with the popular S&P 500 and Nasdaq 100 exchanges.

Most notably, the top of the VUG has a lot of exposure to the Magnificent Seven (or Magnificent Eight, if you add in semi-high-flyer Broadcom (NASDAQ:AVGO). While the VUG is quite similar to many alternative offerings out there, I find it to be a better pick than the Vanguard Information Technology Index ETF (NYSEARCA:VGT) or any Nasdaq 100 ETF.

Why?

One of the major shortcomings of the VGT, in my view, is the limited exposure to most members of the Magnificent Seven. Notably, Amazon (NASDAQ:AMZN) and Tesla (NASDAQ:TSLA)—two core components to the cohort—are seemingly nowhere to be found in the fund. That’s because the two tech titans are technically not information technology plays.

Indeed, one may classify Amazon and Tesla as consumer discretionaries rather than tech plays. As a growth-minded investor seeking exposure to mega-cap tech innovators, I want a good amount of exposure to these names. With the VUG, you’ll have this exposure, making it the better fit for Millennials who want to keep riding the Mag Seven wave higher.

Additionally, the VUG doesn’t exclude growth stocks because of their exchange—the Nasdaq 100 falls short of the VUG in this regard, given it’s exclusive to names listed on the Nasdaq exchange. 

For investors who want an overweighting to the tech sector (weighting of around 58%) without missing key mega-cap tech titans (that aren’t technically classified as information technology stocks) or NYSE-traded growers, the VUG is a go-to option for growth investors.

Ark Fintech Innovation ETF (ARKF)

Since Millennials are still young, an actively managed hyper-growth type of ETF may be worth nibbling on. The Ark Fintech Innovation ETF (NYSEARCA:ARKF) looks very intriguing now that the fintech scene is showing signs of awakening from its lengthy hibernation. Arguably, it’s one of the timelier innovation ETFs in Cathie Wood’s Ark.

With the ARKF, you’ll get a good amount of Bitcoin exposure via Ark Invest’s very own Bitcoin ETF (a 5.1% weighting) as well as shares of crypto trading platform Coinbase (NASDAQ:COIN), which have been roaring higher of late. Additionally, you’re gaining access to innovative e-commerce firms that are leading the charge on digital payments. Whether you’re looking for more exposure to crypto, digital wallets, neobanks, point-of-sales (PoS) solutions, or something similar, you’ll get it all from the ARKF.

In the past two years, shares of ARKF have more than doubled, gaining 127%—momentum that I don’t think will slow in 2025 as fintech plays continue to exhibit relative strength. With a hefty 2.2 beta, be ready for a rocky ride as you bet on Cathie Wood’s favorite disruptors in financial technology.

iShares Semiconductor ETF (SOXX)

Finally, we have the iShares Semiconductor ETF (NASDAQ:SOXX), which is a great fit for Millennial investors who aren’t convinced the AI semi boom is over. With the SOXX in correction territory (down around 15% from its peak) and consolidation mode (the ETF has gained just 6% in a year), Millennials looking to put new money to work may get a relatively decent deal as they wait for the next leg AI-driven leg higher.

Undoubtedly, it did not take long for investors to sour on the semis. While the initial pick-and-shovels phase of the AI boom may be cooling, I still think much of the AI innovation we’ll see moving forward will also come from the semi scene.

From the custom silicon plays like Broadcom, the largest holding in SOXX with an 11.2% weighting, to other chipmakers going all-in on AI, I continue to view the cooling corner of tech as one that’s worth getting into if you’ve got an extended time horizon and an appetite for growth.

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