Here Are 3 ETFs Warren Buffett Would Approve Of for the Average Investor

Picking stocks like Warren Buffett (or any of the most successful investors of all time for that matter) is virtually impossible for the average investor. And while I’m one to talk – I love trying to pick the needle out of the haystack – even the greatest investors in history such as Warren Buffett have concluded that owning some basket of stocks held in a low-cost vehicle like an exchange traded fund (ETF) is likely the best course of action for the average investor. 

The thing is, there are thousands of ETFs out there for investors to choose from. But judging by Warren Buffett’s past comments around steering investors toward low-cost index funds, and those that provide the lowest-cost diversification out there, it’s certainly possible to identify a portfolio of three ETFs that could accomplish the sort of Buffett-like investing strategy so many investors are after.

The following three ETFs are ones I think are among the best options for investors looking to create a truly diversified portfolio, but who don’t necessarily have the time or energy to invest in picking single stocks. 

Vanguard Total Stock Market ETF (VTI)

The Vanguard Total Stock Market ETF (VTI) is one of the exchange traded funds I continue to pound the table on. This ETF comes with one of the lowest expense ratios in the ETF world, with investors paying just 0.03% to gain access to one of the most diversified funds in the market. That’s impressive, given the level of diversification this fund provides. 

Essentially, VTI tracks all publicly-listed U.S. stocks. In other words, investors get the broadest exposure to the U.S. markets in being able to own stocks across the spectrum. Other index ETFs which focus on the S&P 500 or Nasdaq, for example, will provide outsized exposure to large-cap tech stocks, but will ignore the small and mid-cap stocks in the market that can make big moves from time to time. This fund includes all companies traded on U.S. exchanges, regardless of market capitalization.

What that means for long-term investors who expect a broadening out in the stock market to unfold is that this fund should outperform other top-heavy index funds over the medium-term. I’m in this camp, and that’s one reason I prefer VTI over other index funds right now (and the rock-bottom fee as well).

For truly long-term investors, I think the ultra-low-cost value this fund provides in alignment with its extremely high level of diversification check the key boxes that ought to be scrutinized most closely.

Vanguard Institutional Total Stock Market Index Fund (VTSNX)

Of course, having enough exposure to the U.S. market is going to matter for most American investors heading into retirement. But having international exposure has proven to be a big driver of returns, at least in 2025, with international stocks outperforming American companies in the first quarter by a rather wide margin. 

That’s where Vanguard International Total Stock Market Index Fund (VTSNX) comes in handy.

This ETF tracks the performance of the FTSE Global All Cap Ex U.S. Index, meaning this fund holds basically all the stocks in the global market, outside of the U.S.

Thus, for investors who own both VTI and VTSNX, they’ll essentially have exposure to the entire world, in very low-cost vehicles. This particular ETF comes with an expense ratio of just 0.06%, meaning when one averages out these expense ratios (assuming equal positions), it’s possible to own all the stocks in the world for less than 5 basis points of cost. That’s incredible. 

International stocks are continuing to outperform, as investors are looking for places to hide away from Trump’s tariffs. Depending on where an individual investor stands in terms of their expectations for how this trade policy may impact markets over time, adjusting one’s weighting to VTI or VTSNX can alter their exposure over the near-term. Personally, this is one fund I’ve been adding heavily of late, and am glad I did. 

Schwab U.S. Dividend Equity ETF (SCHD)

The last entrant on this list, but in no way the least significant, is the Schwab U.S. Dividend Equity ETF (SCHD). This dividend-focused ETF provides investors with a little added exposure to high-quality companies that pay consistent dividends.

This fund focuses on quality, screening for the best companies that have shown the most consistent dividend payments (with the best balance sheets) on the Dow Jones U.S. Dividend 100 Index. Thus, for investors concerned about quality in this current environment, this company is a great choice inherently.

However, I think for long-term investors thinking about retirement, this fund’s dividend yield, which usually hovers between 3% and 4% can provide meaningful income in retirement, and allow an investor to stay more heavily invested in the growth areas of their portfolios when pulling out capital when the time comes. Thus, this is a top holding for me in my retirement accounts, for more reasons than simply the quality of the underlying holdings and their solid balance sheets and dividend prospects moving forward. 

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