A top ETF to buy with $2,000 and hold forever

When you’re in the middle of your career, investing is all about balance. You still have time on your side, so growth is important, but you also want something that you can hold on to through market cycles without constantly second-guessing yourself. The biggest enemy at this stage is over-complication.

A diversified exchange-traded fund (ETF) that combines strong growth potential with some built-in risk management can solve that problem. If I had $2,000 to invest today and wanted one ETF that I could realistically hold for decades, I would… BMO Growth ETF (TSX: ZGRO) would be a very strong candidate.

ZGRO: 80% in shares

ZGRO is an asset allocation ETF designed for investors who want growth first, but not at all costs. Like other all-in-one ETFs, it is a fund of funds. Rather than selecting individual stocks, it features a collection of underlying BMO ETFs that together form a globally diversified portfolio.

The growth engine is the allocation of 80% to shares. That equity exposure includes Canadian equities through the S&P/TSX Capped CompositeUS large caps via the S&P500developed international markets through the MSCI EAFE indexand emerging markets. There is also exposure to US mid- and small-cap stocks, adding an extra layer of long-term growth potential.

Stocks tend to rise over time as companies grow profits, reinvest capital, expand into new markets and return cash through dividends and buybacks. There will be periods of underperformance. That is inevitable. The advantage of ZGRO is that you do not bet on one country, sector or company. You own thousands of companies around the world in one transaction.

ZGRO: 20% in bonds

The remaining 20% ​​of the portfolio is invested in bonds. This is not intended to eliminate volatility. It’s there to reduce the chance of extreme outcomes and help investors stay invested when stock markets are under pressure.

ZGRO focuses on investment grade bonds, including Canadian bonds and U.S. aggregate bonds. These typically include government bonds, high quality corporate bonds and securitized assets. They generate stable income and tend to behave differently than stocks during periods of economic stress.

Bonds will not drive long-term growth. They are unlikely to outperform stocks in the long term. Their role is structural. They provide stability, some income generation, and smoother trading during stock market downturns, which matters more than most people realize when markets get uneasy.