1 safe and reliable ETF that will get you through any stock market sell-off

The last few weeks have been turbulent for the stock market. S&P500 (^GSPC 0.97%) Between mid-July and early August, the share price fell by around 8.5 percent, coming dangerously close to the correction zone.

Although the market has largely recovered since then, many investors are still concerned that another sell-off could be imminent. Given the unpredictability of the market in the short term, there is always a chance that a downturn is imminent.

However, the right strategy can help protect your savings. While no investment is completely immune to volatility, there is one type of fund that is virtually guaranteed to survive downturns and generate positive returns over time: the S&P 500 ETF.

What is an S&P 500 ETF?

An exchange-traded fund (ETF) is a collection of stocks combined into a single fund, and each ETF tracks a specific market index.

An S&P 500 ETF – like the Vanguard S&P 500 ETF (VOO 0.96%)for example – tracks the S&P 500 and contains the same stocks as the index. Since it is not possible to invest in the S&P 500 itself, the closest thing you can get is investing in an ETF that tracks the performance of the index.

The S&P 500 itself contains stocks of 500 of the largest companies in the U.S. from a variety of industries. If you invest in just one share of an S&P 500 ETF, you instantly own a share of all 500 of those companies. This makes it much easier (and more affordable) to build a diversified portfolio, which can reduce your risk.

And because companies in the S&P 500 are among the healthiest in the world, they are far more likely to survive periods of market volatility.

In the Vanguard S&P 500 ETF, for example, the five largest holdings are Apple, Microsoft, NVIDIA, AmazonAnd on facebook.. Although these companies often suffer significant losses during downturns, these types of stocks are also likely to recover from severe downturns and bear markets. Only the strongest companies are included in the S&P 500, so these stocks are among the best of the best.

Surviving market volatility

The S&P 500 ETF is not only a strong investment in theory. History shows that it has an impeccable track record when it comes to delivering positive returns over the long term.

Analysts at Crestmont Research examined the historical returns of the S&P 500, looking specifically at how it performed over 20-year periods, and then determined how many of those periods ended in gains versus losses.

The results? Every single 20-year period in the index's history has ended with positive total returns. That means if you invested in an S&P 500 tracking fund at any point and simply held it for 20 years, you would have made money — even if the market was extremely volatile during that period.

In the last two decades alone, the S&P 500 has experienced devastating downturns—from the dot-com crash in the early 2000s to the Great Recession to the COVID-19 crash and more. But since 2000, the index is still up a whopping 278%.

^SPX data from YCharts

In other words, if you had invested in an S&P 500 fund in 2000 and simply held it (without making additional contributions), you would have more than tripled your money by today.

Finally, one of the best things about investing in an S&P 500 ETF is that it requires virtually no effort. All of the stocks are already selected for you, and since this investment offers the best performance over the long term, you don't have to worry about when to sell. Just buy now and hold on to the stock for as long as you can, and you're almost guaranteed to see results – no matter what happens to the market.

If you're nervous about the market right now, that's normal. But the right investment can help you build wealth while limiting risk. For those looking for a low-effort fund with a fantastic track record, the S&P 500 ETF is one of the best (and safest) options on the market.