Investors often hold blue-chip stocks at the core of their portfolios. That makes sense. After all, blue-chip companies are leaders in their industries. Their names are familiar to investors.
Are you scratching your head trying to figure out which blue-chip fund deserves your hard-earned money? You’re not alone! With so many options out there, finding the perfect blue-chip ETF or fund can feel like searching for a needle in a haystack. I’ve spent countless hours researching the top contenders, and I’m excited to share what I’ve discovered
What Exactly Are Blue-Chip Stocks and Funds?
Before diving into specific recommendations, let’s clarify what we’re talking about. The term “blue chip” has a fascinating origin—it dates back to 1923 when Dow Jones employee Oliver Gingold used it to describe companies trading at $200+ per share. He borrowed the term from poker, where the highest-value chips were blue.
Today, blue-chip stocks typically refer to large established companies that are
- Household names with strong brand recognition
- Part of major indexes like the S&P 500 or Dow Jones Industrial Average
- Known for stability and reliability
- Often dividend payers with long operating histories
- Financially sound with strong balance sheets
Blue-chip funds, therefore, are investment vehicles (ETFs or mutual funds) that focus on these high-quality, established companies.
9 Top Blue-Chip ETFs to Consider in 2025
After analyzing performance, expenses, and holdings, here are the standout blue-chip ETFs worth considering:
1. Vanguard S&P 500 ETF (VOO)
Expense Ratio 003%
VOO is currently the largest U.S.-listed ETF with a whopping $711 billion in assets. It gives you exposure to the entire S&P 500, which includes many blue-chip stalwarts. With its rock-bottom expense ratio, it’s hard to beat for core portfolio exposure.
What I love about VOO is its simplicity and cost-effectiveness. For just $3 annually per $10,000 invested, you get a slice of 500 of America’s largest companies. It pays quarterly distributions and offers instant diversification.
2. SPDR Dow Jones Industrial Average ETF Trust (DIA)
Expense Ratio: 0.16%
If you want pure blue-chip exposure, DIA is tough to beat. It holds all 30 companies in the Dow Jones Industrial Average—arguably the most recognized collection of blue-chip stocks in existence.
DIA has a unique structure as one of the few ETFs still organized as a unit investment trust. This means it has a fixed termination date and pays monthly distributions, which some income-focused investors might appreciate.
3. Invesco Nasdaq 100 ETF (QQQM)
Expense Ratio: 0.15%
For those who want blue-chip exposure with a technology tilt, QQQM delivers access to the 100 largest non-financial stocks on the Nasdaq. This ETF has been a performance powerhouse, delivering an impressive 19.7% annualized return over the past decade, outperforming both the S&P 500 and the broader Nasdaq composite.
4. iShares S&P 100 ETF (OEF)
Expense Ratio: 0.20%
If you want a more concentrated blue-chip portfolio, OEF might be your answer. It focuses on approximately the top quintile of the S&P 500, giving you exposure to the biggest of the big. Compared to VOO, it’s more top-heavy with greater allocations to tech, consumer discretionary, and communication services.
5. Invesco S&P 500 Top 50 ETF (XLG)
Expense Ratio: 0.20%
Even more concentrated than OEF, XLG holds just the 50 largest companies in the S&P 500. As Nick Kalivas from Invesco points out, “Besides exposure to large companies, XLG is currently tilted toward the quality, growth and momentum factors.”
This ETF is VERY top-heavy, with the three largest tech companies accounting for over 32% of the fund’s weight. If you believe the biggest blue chips will continue to outperform, this could be a great choice.
6. Vanguard Mega Cap ETF (MGC)
Expense Ratio: 0.07%
Henry Yoshida, SVP of Retired.com, suggests prioritizing “ETFs with substantial assets under management, long track records, and low expense ratios.” MGC checks all these boxes while providing exposure to the largest U.S. companies at a very reasonable cost.
7. Fidelity Blue Chip Growth ETF (FBCG)
Expense Ratio: 0.59%
For those who prefer active management, FBCG offers the same strategy as the popular Fidelity Blue Chip Growth Fund (FBGRX) that’s been a 401(k) staple for years. While more expensive than passive options, this ETF has historically outperformed its benchmark, the Russell 1000 Growth Index.
As an actively managed option, FBCG doesn’t disclose holdings daily and uses a semi-transparent ETF structure. The higher fee might be worth it if the managers continue their track record of outperformance.
8. SPDR Portfolio S&P 500 High Dividend ETF (SPYD)
Expense Ratio: 0.07%
If income is your priority, SPYD isolates the 80 highest-yielding stocks from the S&P 500 and equal-weights them quarterly. With a juicy 4.6% SEC yield and a value tilt, this ETF can be an excellent choice for retirees or income-focused investors. The low 0.07% expense ratio makes it even more attractive.
9. S&P 500 Dividend Aristocrats ETF (NOBL)
Expense Ratio: 0.35%
Rather than chasing the highest current yields like SPYD, NOBL takes a different approach, focusing on S&P 500 companies that have increased their dividends for at least 25 consecutive years. This emphasis on dividend growth rather than current yield tends to result in a higher-quality portfolio.
NOBL has more exposure to consumer staples and industrials compared to the tech-heavy S&P 500, providing valuable diversification for many portfolios.
Comparison Table of Top Blue-Chip ETFs
| ETF | Expense Ratio | Focus | Yield | Best For |
|---|---|---|---|---|
| VOO | 0.03% | Broad market | Moderate | Core holding |
| DIA | 0.16% | Pure blue chip | Moderate | Traditional blue-chip exposure |
| QQQM | 0.15% | Tech-oriented | Lower | Growth investors |
| OEF | 0.20% | Top 100 | Moderate | Concentrated core |
| XLG | 0.20% | Top 50 | Moderate | Mega-cap focus |
| MGC | 0.07% | Mega caps | Moderate | Low-cost mega-cap exposure |
| FBCG | 0.59% | Active growth | Low | Growth seekers willing to pay for active management |
| SPYD | 0.07% | High yield | High | Income investors |
| NOBL | 0.35% | Dividend growth | Moderate | Quality and consistency seekers |
How to Choose the Best Blue-Chip Fund for YOU
When deciding which blue-chip fund is right for your portfolio, consider these factors:
1. Investment Goals
- Growth: QQQM or FBCG might be better choices
- Income: SPYD or NOBL could be more appropriate
- Stability: DIA or NOBL tend to be less volatile
2. Existing Portfolio
Already heavy in tech? Maybe avoid QQQM and consider NOBL for better sector diversification.
3. Cost Sensitivity
If minimizing fees is crucial, VOO, MGC, and SPYD offer the lowest expense ratios.
4. Tax Situation
For taxable accounts, ETFs generally offer better tax efficiency than mutual funds due to their in-kind creation/redemption process.
5. Time Horizon
Longer time horizons might justify more growth-oriented options like QQQM or FBCG, while shorter horizons might call for the stability of DIA or NOBL.
My Personal Take
If I had to pick just one blue-chip fund for a core portfolio holding, I’d probably go with VOO due to its broad exposure, rock-bottom fees, and impressive track record. However, I’d consider complementing it with NOBL for quality dividend growth exposure and some sector diversification.
For more aggressive investors, a combination of QQQM and SPYD could provide both growth potential and income while maintaining blue-chip quality.
Common Questions About Blue-Chip Funds
Are blue-chip funds good for beginners?
Absolutely! Their stability and name recognition make them excellent starter investments. VOO or DIA would be my top recommendations for newcomers.
How much of my portfolio should be in blue-chip funds?
This depends on your age, risk tolerance, and financial goals. Many financial advisors suggest that your age in percentage could be a starting point for allocation to stable investments like blue chips (e.g., 40% for a 40-year-old).
Can blue-chip funds protect against market downturns?
While no equity investment is immune to market drops, blue-chip funds typically experience less volatility during downturns. NOBL and DIA, in particular, have historically shown better downside protection.
Should I choose an ETF or mutual fund for blue-chip exposure?
ETFs generally offer lower costs, better tax efficiency, and intraday trading flexibility. However, if you’re regularly investing small amounts, some mutual funds might allow for smaller minimum investments without commission fees.
Final Thoughts
There’s no one-size-fits-all “best” blue-chip fund—the right choice depends on your personal financial situation, goals, and existing investments.
VOO offers the broadest exposure at the lowest cost. DIA provides pure blue-chip exposure with a long track record. QQQM gives a growth and tech tilt. NOBL focuses on quality dividend growers. Each serves a different purpose in a well-designed portfolio.
The good news? With expense ratios as low as 0.03% for VOO, you’re no longer forced to choose just one. For less than the cost of a fancy coffee, you could own several of these funds and build a diversified blue-chip portfolio tailored exactly to your needs.
What’s your favorite blue-chip fund? Have you had good experiences with any of these options? I’d love to hear your thoughts in the comments below!
3 Great Companies to Buy Trading at Fair Prices When stocks get pricey, follow Charlie Munger’s advice.
The Morningstar fair value estimate represents what Morningstar analysts think a particular stock is worth. Fair value estimates are rooted in the fundamentals and based on how much cash we think a company can generate in the future, not on fleeting metrics such as recent earnings or current stock price momentum.
The Morningstar Style Box, meanwhile, is a nine-square grid that provides a graphical representation of the investment style of stocks, bonds, or funds. Based on a series of inputs—including a company’s historical and long-term projected growth and its historical and forward-looking price multiples—a stock is classified as either a value stock, a growth stock, or a core stock. A stock is also classified as either small-cap, mid-cap, or large-cap based on its market capitalization.
Last, the Morningstar Capital Allocation Rating is an assessment of how well a company manages its balance sheet investments and shareholders’ distributions. Analysts assign each company one of three ratings—Exemplary, Standard, or Poor—based on their assessments of how well a management team provides shareholder returns.
10 Best Blue-Chip Stocks to Buy for the Long Term—October 2025
These are the largest firms by market cap on Morningstar’s Best Companies to Own list whose stocks were the most undervalued as of Oct. 3, 2025.
- Danaher DHR
- Merck MRK
- Roche RHHBY
- Deere DE
- S&P Global SPGI
- Nestle NSRGY
- Microsoft MSFT
- Thermo Fisher Scientific TMO
- PepsiCo PEP
- SAP SAP
Here’s a little bit about each of these blue-chip stocks for the long term. Data is as of Oct. 3.
- Market Capitalization: $150 billion
- Morningstar Price/Fair Value: 0.80
- Morningstar Style Box: Large Value
- Trailing 12-Month Yield: 0.57%
- Morningstar Capital Allocation Rating: Exemplary
- Industry: Diagnostics and Research
Medical-technology company Danaher is the most undervalued company on our list of best blue-chip stocks to buy and the first of four healthcare companies to make the list. The firm offers differentiated technology that is protected by various intangible assets, including patents, brands, copyrights, and trademarks, says Morningstar senior analyst Julie Utterback. Danaher seeks out attractive markets and makes acquisitions to enter or expand within those fields, and it also divests assets that are no longer core to the business. The company’s acquisition-focused strategy has contributed to it becoming a top-five player in the highly fragmented and relatively sticky life science and diagnostic tool markets. Danaher stock trades at a 20% discount to our fair value estimate of $270 per share.
- Market Capitalization: $223 billion
- Morningstar Price/Fair Value: 0.80
- Morningstar Style Box: Large Value
- Trailing 12-Month Yield: 3.63%
- Morningstar Capital Allocation Rating: Standard
- Industry: Drug Manufacturers—General
Merck’s combination of a wide lineup of high-margin drugs and a pipeline of new drugs should ensure strong returns on invested capital over the long term, says Morningstar director Karen Andersen. After several years of mixed results, Merck’s research and development productivity is improving as the company shifts more toward areas of unmet medical need. Merck’s new products have mitigated the generic competition, offsetting recent major patent losses. In particular, Keytruda for cancer represents a key blockbuster with multi-billion-dollar potential. We expect Keytruda’s leadership in non-small cell lung cancer and several other cancers will be a key driver of growth for the firm over the next several years, but the 2028 US patent loss on the drug will create eventual pressure. Merck stock is trading 20% below our fair value estimate of $111 per share.
- Market Capitalization: $288 billion
- Morningstar Price/Fair Value: 0.82
- Morningstar Style Box: Large Core
- Trailing 12-Month Yield: 3.07%
- Morningstar Capital Allocation Rating: Exemplary
- Industry: Drug Manufacturers—General
Drug manufacturer Roche’s drug portfolio and industry-leading diagnostics provide significant competitive advantages and underpin our wide economic moat rating, says Morningstar’s Andersen. “This Swiss healthcare giant is in a unique position to guide healthcare into a safer, more personalized, and more cost-effective endeavor,” she notes. With its biologics focus and innovative pipeline, we expect Roche to continue to achieve growth as its blockbuster drugs face competition. Roche stock trades 18% below our fair value estimate of $55 per share.
- Market Capitalization: $125 billion
- Morningstar Price/Fair Value: 0.84
- Morningstar Style Box: Large Value
- Trailing 12-Month Yield: 1.40%
- Morningstar Capital Allocation Rating: Exemplary
- Industry: Farm and Heavy Construction Machinery
Deere is new to our list of best blue-chip stocks to buy. The firm is one of the world’s leading providers of machinery serving agricultural, construction, and other industrial markets. As Deere has significant exposure to the agricultural industry, it is considered a cyclical stock that is sensitive to economic cycles. Company management seeks to reduce earnings volatility during downturns by reducing costs and building efficiency. Deere has also focused on technical innovation. “The company is well on its way to achieving its objectives over the 2026 and 2030 time frames, which are essentially about increasing the attach rate of technology sales to its equipment,” says Morningstar analyst George Maglares. Deere stock trades 16% below our fair value estimate of $550 per share.
- Market Capitalization: $145 billion
- Morningstar Price/Fair Value: 0.84
- Morningstar Style Box: Large Core
- Trailing 12-Month Yield: 0.79%
- Morningstar Capital Allocation Rating: Exemplary
- Industry: Financial Data & Stock Exchanges
Financial-services company S&P Global is also new to our list of best blue-chip stocks to buy. S&P Global has carved out a wide economic moat from its data-driven benchmarks focused on credit markets, financial indexes, and commodities price reporting. Once a benchmark is accepted by capital or commodity market participants, it is difficult to displace. As a result, S&P has strong pricing power in its ratings and index subscriptions. Strategically sensible acquisitions, including the 2022 acquisition of IHS Markit, and attractive distribution policies earn the firm’s management an Exemplary Capital Allocation Rating, says Morningstar analyst Rajiv Bhatia. S&P Global stock is trading at a 16% discount to our $570 fair value estimate.
- Market Capitalization: $239 billion
- Morningstar Price/Fair Value: 0.85
- Morningstar Style Box: Large Value
- Trailing 12-Month Yield: 3.96%
- Morningstar Capital Allocation Rating: Standard
- Industry: Packaged Foods
Nestle is the largest food and beverage manufacturer in the world by sales. Its diverse product portfolio includes brands such as Nestle, Nescafé, Perrier, Pure Life, and Purina. Nestle faces competition from local operators, and past missteps have caused the firm to miss out on or be late to the latest consumer trends. However, current management is taking steps to reverse past trends, says Morningstar analyst Diana Radu. The management team aims to reinvigorate growth through active portfolio management, resetting legacy businesses, and further investment in high-growth categories (coffee, pet care, water, and nutrition). Nestle stock trades 15% below our fair value estimate of $110 per share.
- Market Capitalization: $3.8 trillion
- Morningstar Price/Fair Value: 0.86
- Morningstar Style Box: Large Core
- Trailing 12-Month Yield: 0.64%
- Morningstar Capital Allocation Rating: Exemplary
- Industry: Software—Infrastructure
Tech giant Microsoft rejoins our list of the best blue-chip stocks to buy for the long term. Microsoft is one of two public cloud providers that can deliver a wide variety of platform-as-a-service/infrastructure-as-a-service solutions at scale. It has also emerged as a leader in artificial intelligence because of its investment in OpenAI. Morningstar senior analyst Dan Romanoff sees Microsoft as a more focused company that offers impressive revenue growth with high and expanding margins. He argues that Azure is the centerpiece of the new Microsoft, as it is an excellent launching point for secular trends in AI, business intelligence, and Internet of Things. Even though we estimate it is already an approximately $75 billion business, it is still growing at approximately 30% annually. Microsoft stock trades 14% below our fair value estimate of $600 per share.
- Market Capitalization: $198 billion
- Morningstar Price/Fair Value: 0.86
- Morningstar Style Box: Large Value
- Trailing 12-Month Yield: 0.31%
- Morningstar Capital Allocation Rating: Exemplary
- Industry: Diagnostics & Research
Thermo Fisher, the last of four healthcare companies on our list, is weathering the pullback in global biopharmaceutical spending better than most of its peers. As the premier life science supplier with an unmatched portfolio of products, resources, and manufacturing capabilities, the company has been able to retain and grow its wallet share among its customers across all channels, observes Morningstar regional director Alex Morozov. The firm remains in a great position to leverage its share gains in the biopharma channel and capitalize on strong long-term demand. Thermo Fisher stock is trading at a 14% discount to its fair value estimate of $630 per share.
- Market Capitalization: $195 billion
- Morningstar Price/Fair Value: 0.87
- Morningstar Style Box: Large Value
- Trailing 12-Month Yield: 3.91%
- Morningstar Capital Allocation Rating: Exemplary
- Industry: Beverages—Nonalcoholic
Despite years of anemic growth due to operational missteps, PepsiCo benefits from tight retail relationships on the back of strong beverage and snack brands. “Demand for snacks and beverages tends to remain resilient throughout economic cycles, and a large end-to-end supply chain gives Pepsi better control over execution, helping to shield its operations from external shocks,” says Morningstar analyst Dan Su. Management has course-corrected in recent years to drive steady top-line and profit expansion. Shares of PepsiCo stock are 13% undervalued compared with our $164 fair value estimate.
- Market Capitalization: $314 billion
- Morningstar Price/Fair Value: 0.87
- Morningstar Style Box: Large Growth
- Trailing 12-Month Yield: 0.94%
- Morningstar Capital Allocation Rating: Standard
- Industry: Software—Application
Software application company SAP rounds out our list of the best blue-chip stocks to buy for the long term. With well-known products like Concur and Ariba, SAP is the world’s largest provider of enterprise application software and the global market leader in enterprise resource planning software. Morningstar senior analyst Rob Hales expects low to midteens revenue growth in the near and midterm, driven by the firm’s core cloud ERP offerings, Rise with SAP and Grow with SAP. Shares of SAP stock are trading 13% below our fair value estimate of $311.