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8 Blue Chip Stock ETFs to Consider in 2022

Blue chip stocks are large, well-established and well-known businesses. In tough economic times, many investors favor blue chip companies. They expect blue chip stocks to generate investment returns with more stable prices and dividend payouts to avoid the volatility of smaller and more speculative stocks.

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Even in the world of blue chip companies, there are plenty of stocks that are spread across all sectors of the economy. It can be difficult to decide which stock is the best bet in this corner of the investing world. That’s where blue chip stock ETFs come in.

Investing in Blue Chip Stock ETFs

An exchange-traded fund (ETF) is an investment vehicle that trades like a stock. However, with each share purchased, an investor gets immediate diversification through the portfolio of shares contained within the fund. A blue chip stock ETF can give portfolio exposure to dozens or even hundreds of different companies across the entire economic spectrum.

There are many different blue chip ETFs to choose from. Here is a list of some of the top offerings in 2022:

ETFs

assets under management

annual fee

description

SPDR S&P 500 ETF (NYSEMKT:SPY)

$363 billion

0.0945%

A fund that tracks the performance of the S&P 500 Index.

SPDR Dow Jones Industrial Average ETF (NASDAQ:DIA)

$27.7 billion

0.16%

An ETF that tracks the performance of 30 stocks in the Dow Jones Index.

Invesco QQQ Trust (NASDAQ:QQQ)

$165 billion

0.2%

This ETF tracks the 100 largest non-financial stocks listed on the Nasdaq Stock Exchange.

Vanguard Dividend Appreciation ETF (NYSEMKT:VIG)

$75.9 billion

0.06%

If you’re looking to grow investment income, this ETF is designed to deliver exactly that.

iShares Core High Dividend ETF (NYSEMKT:HDV)

$12.4 billion

0.08%

A fund made up of large companies that pay relatively high dividend returns.

Vanguard Growth ETF (NYSEMKT:VUG)

$153 billion

0.04%

This ETF invests in high-growth large-cap stocks.

iShares MSCI EAFE ETF (NYSEMKT:EFA)

$43.3 billion

0.32%

An international stock fund of large companies outside the US and Canada.

iShares Global 100 ETF (NYSEMKT:IOO)

$3.65 billion

0.4%

Investing in the top 100 biggest global stocks.

Data sources: iShares, Vanguard, State Street SPDR, and Invesco. Present till September 9, 2022.

1. SPDR S&P 500 ETF

The first step in choosing an ETF is deciding what you need to complete your portfolio. For many investors, this begins with gaining growth and income from broad-based stock market exposure. That’s where the SPDR S&P 500 ETF comes in, which is one of the most recognized funds.

As its name implies, the performance of the ETF reflects S&P 500 Index – One of the three most cited indices of stock market performance that tracks the 500 largest US companies listed on the US Stock Exchange. It also happens to be the largest ETF with $363 billion in investor funds under management. The annual fee is just 0.0945% annually (or $0.94 per year for every $1,000 invested).

2. SPDR Dow Jones Industrial Average ETF

The Dow Jones Industrial Average, often simply referred to as the “Dow”, is another most-watched index in the US for measuring the performance of a stock. The index is composed of 30 US blue chip company stocks that serve as a gauge of the health of the overall US stock market, although most professional investors focus on indexes such as the S&P 500 or Nasdaq Composite to judge market conditions. We do.

Still, if investing in the Dow’s curated 30-stock portfolio is what you’re after, the SPDR Dow Jones Industrial Average ETF is a solid blue chip investment. The fund charges 0.16% annually. It provides exposure to every sector of the US economy, although the Dow Index is heavily skewed toward health care, technology, and financial services.

3. Invesco QQQ Trust

The third widely viewed and cited US stock index is the Nasdaq Composite Index, which includes all company stocks that are listed exclusively on the Nasdaq Stock Exchange. Although it has become more diversified over the years, the Nasdaq is heavy on technology.

For a blue chip stock twist on the Nasdaq, though, consider Invesco QQQ Trust. The ETF is one of the largest and most traded funds and focuses on the largest 100 non-financial company stocks on the Nasdaq Exchange. The annual fee is 0.2%. The Top Five Holdings in ETFs Are Reputable Tech Brands Apple (NASDAQ:AAPL) , Microsoft (NASDAQ:MSFT), heroine (NASDAQ:AMZN), Tesla (NASDAQ:TSLA), and Google Parent Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) .

4. Vanguard Dividend Appreciation ETF

One of the top reasons to invest in blue chip stocks is for dividends — the extra cash that a company pays to its shareholders. Even better than a dividend, however, is a dividend that grows over time. That’s where the Vanguard Dividend Appreciation ETF shines.

The ETF consists of 289 large company stocks that have a track record of increasing dividend payouts over time. A rising dividend is proof a company can increase its profitability, which is the primary driver of stock price appreciation. A rising stock price and a rising dividend give investors two ways to combine their investment returns. The Vanguard Dividend Appreciation ETF has an annual fee of just 0.04% per year.

5. iShares Core High Dividend ETF

Not all dividend-paying stocks need to prove their ability to make them a worthy investment in order to rapidly increase their payout over time. The iShares Core High Dividend ETF takes an alternative approach to income-generating blue chip stocks. It invests in 75 large companies in good financial health and gives relatively high dividend returns.

The fund charges an annual fee of 0.08%. Its focus is on sectors of the economy that pay high dividend yields, such as energy and utilities, health care and consumer goods companies. Top holdings include energy giants ExxonMobil (NYSE:XOM) and beam (NYSE: CVX), pharmaceutical companies johnson and johnson (NYSE:JNJ) and AbbVie (NYSE:ABBV), and telecom household names Verizon (NYSE:VZ).

6. Vanguard Growth ETF

Not every blue chip stock needs to be a big dividend payer. Even large companies can still keep above average sales growth rates. If blue chip company growth is what you’re looking for, the Vanguard Growth ETF is a top choice.

The fund invests in 260 large US companies that are still growing rapidly. The fund charges only 0.04% per year and manages $153 billion in client funds. However, investing in growing companies comes with trade-offs. About half of the fund’s assets are allocated to technology stocks (Apple, Microsoft, Alphabet, and others). While these businesses have better prospects for expansion over time, their share prices tend to fluctuate much more in value than the overall market. This makes it one of the more volatile blue chip ETFs on this list.

7. iShares MSCI EAFE ETF

Big, well-established, and easily recognizable businesses don’t just come from the US. The whole world is full of top brands, and it’s possible to invest in them, too. The iShares MSCI EAFE ETF aims to help with just that. The fund is made up of over 800 large company stocks based outside the US and Canada.

The ETF charges 0.32% per year, and the top holdings include Food Group. to shelter (OTC:NSRGY), healthcare products and large pharma company roche (OTC:RHHBY), and top semiconductor technologist ASML Holding (NASDAQ:ASML) .

8. iShares Global 100 ETF

iShares Global 100 ETF is another international blue chip company fund. It includes stocks from North America and only holds the 100 largest businesses in the world. The ETF charges a 0.4% annual fee.

The fund offers investors a global mix of all the companies mentioned above – from tech titans to large healthcare companies to financial services providers. Businesses also run the gamut from rapidly growing to more stable dividend payers. For a well-rounded portfolio of large-cap stocks, the iShares Global 100 ETF is worth a look.

Related Investment Topics

Blue Chip Stocks Aren’t the Right Solution

Many investors are drawn to blue chip stocks in the hope that these companies will help them safely out of the economic storm. However, even large and well-established companies can endure painful turmoil. Investing in blue chips certainly doesn’t mean avoiding the ups and downs of the stock market.

A well-diversified lineup of blue chip stocks is a resilient portfolio that can roll with the punches and rebound after the economy falters. Blue chip stocks are also ideal for income-seeking investors as well-established companies are able to deliver dividends even in tough times.

Whatever your goal as an investor, blue chip stocks should comprise some portion of your investment. Investing in ETFs can help you build a list of blue chip names without having to hand big businesses for your investment dollars.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John McKay, CEO of Whole Foods Market, a subsidiary of Amazon, is a member of The Motley Fool’s board of directors. Nicolas Rosolillo holds positions in Alphabet (C Shares), Amazon, Apple, Tesla and the Vanguard Growth ETF. The Motley Fool has positions in and recommends ASML Holding, Alphabet (A share), Alphabet (C share), Amazon, Apple, Microsoft, Tesla, Vanguard Dividend Appreciation ETF and Vanguard Growth ETF. The Motley Fool recommends Johnson & Johnson, Nestle and Verizon Communications and recommends the following options: long March 2023 $120 call on Apple and short March 2023 $130 call on Apple. The Motley Fool has a disclosure policy.

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