The article highlights three Vanguard growth ETFs—Vanguard S&P 500 Growth ETF, Vanguard Mega Cap Growth ETF, and Vanguard Information Technology ETF—that have historically outperformed the S&P 500 and could potentially do so in the future, especially if the tech sector continues to thrive. These funds offer higher return prospects but come with increased volatility, making them suitable for long-term investors willing to accept higher risk for greater rewards.
Three Vanguard ETFs—Dividend Appreciation, S&P 500 Value, and Energy—have underperformed the S&P 500 in 2024 due to the dominance of growth stocks like Nvidia. However, these ETFs, with their focus on quality holdings and reasonable valuations, are predicted to outperform the index by 2025. The Dividend Appreciation ETF blends growth and value stocks, the S&P 500 Value ETF offers less exposure to high-priced sectors, and the Energy ETF benefits from low valuations and strong balance sheets in the energy sector.
With the S&P 500 hitting record highs, it's still a good time to invest in the long term. Two recommended Vanguard ETFs for a $900 investment are the Vanguard S&P 500 ETF (VOO) and the Vanguard S&P 500 Growth ETF (VOOG). VOO tracks the S&P 500 index with a low expense ratio of 0.03%, while VOOG focuses on high-growth stocks, particularly in the technology sector, with an expense ratio of 0.1%. Both ETFs offer exposure to top tech companies like Microsoft, Apple, and Nvidia, and have shown strong historical returns.
With the S&P 500 officially in a bull market, now is an opportune time to invest in Vanguard ETFs. The Vanguard S&P 500 ETF offers diversified exposure to 500 top U.S. companies with a low expense ratio, while the Vanguard Total Stock Market ETF provides even broader diversification across 3,750 stocks. For those seeking above-average returns and willing to take on more risk, the Vanguard Growth ETF, with a history of outperforming, may be a compelling option. Each ETF caters to different investment goals and risk tolerances, making it essential to weigh the pros and cons before making a decision.
