3 Vanguard ETFs Poised to Outperform the S&P 500 by 2026
Investing in Exchange-Traded Funds (ETFs) can be a strategic approach to build wealth. Particularly, growth-focused ETFs have demonstrated a capacity to yield above-average returns over time. Among these, three Vanguard ETFs stand out as potential outperformers of the S&P 500 by 2026.
1. Vanguard S&P 500 Growth ETF (VOOG)
The Vanguard S&P 500 Growth ETF targets stocks from the S&P 500 known for their long-term growth potential. This fund consists exclusively of high-growth stocks, which could enhance return prospects.
- Current Price: $443.51
- Today’s Change: +1.32%
- Average Annual Return (10 years): 16.69%
- Day’s Range: $439.82 – $443.53
Historically, it has outperformed the general S&P 500 ETF, which reflected a 14.58% average return over the same period. Given the significant influence of technology stocks within this ETF, continued success in tech could accelerate its growth further.
2. Vanguard Mega Cap Growth ETF (MGK)
The Vanguard Mega Cap Growth ETF focuses specifically on mega-cap stocks, defined as companies with market capitalizations exceeding $200 billion. With a portfolio of just 66 stocks, it offers a concentrated investment approach.
- Current Price: $413.02
- Today’s Change: +1.44%
- Average Annual Return (10 years): 18.08%
- Day’s Range: $409.59 – $413.12
This focused strategy has yielded higher returns, with an impressive average rate of 30.55% over the last three years. However, investors should be aware that this type of niche investing can lead to increased volatility.
3. Vanguard Information Technology ETF (VGT)
The Vanguard Information Technology ETF encompasses a diverse array of 322 stocks within the technology sector. Approximately one-third of its holdings are in semiconductor stocks, which are integral to advancements in artificial intelligence.
- Current Price: $755.54
- Today’s Change: +2.02%
- Average Annual Return (10 years): 22.18%
- Day’s Range: $745.96 – $756.09
This ETF has proven extremely profitable, outpacing both the S&P 500 Growth ETF and the Mega Cap Growth ETF over the decade. While well-diversified, concentrating in a single sector can pose risks, so it’s essential for investors to maintain a diversified portfolio.
Potential Earnings from Vanguard ETFs
While predicting long-term market conditions is challenging, these three ETFs may yield significant returns if they maintain their historical performance. For example, consistently investing $200 per month in these funds could result in substantial wealth accumulation over time. Below is a projection for a 25-year investment period:
| Investment Period (Years) | Vanguard S&P 500 ETF (VOO, 14.58% AVG Return) | Vanguard S&P 500 Growth ETF (VOOG, 16.69% AVG Return) | Vanguard Mega Cap Growth ETF (MGK, 18.08% AVG Return) | Vanguard Information Technology ETF (VGT, 22.18% AVG Return) |
|---|---|---|---|---|
| 15 | $110,000 | $131,000 | $147,000 | $208,000 |
| 20 | $234,000 | $301,000 | $355,000 | $584,000 |
| 25 | $478,000 | $667,000 | $833,000 | $1,608,000 |
In conclusion, while these Vanguard ETFs are not devoid of risks, especially in turbulent market conditions, they offer significant potential for growth. For investors willing to embrace higher levels of risk, these growth ETFs could be a means to outperform the S&P 500 by 2026.
