Prediction: These 2 Vanguard ETFs Will Beat the S&P 500 in 2025
The S&P 500 has been a solid benchmark that has produced annualized double-digit returns for many years. However, it’s possible for investors to outperform the S&P 500. Investors who want to outperform the index with individual stocks can start by looking within the index. Any index has individual stocks that have outperformed it since indices […] The post Prediction: These 2 Vanguard ETFs Will Beat the S&P 500 in 2025 appeared first on 24/7 Wall St..
The S&P 500 has been a solid benchmark that has produced annualized double-digit returns for many years. However, it’s possible for investors to outperform the S&P 500. Investors who want to outperform the index with individual stocks can start by looking within the index. Any index has individual stocks that have outperformed it since indices like the S&P 500 also contain underperforming stocks.
However, you don’t have to pick individual stocks to beat the S&P 500. There are some Vanguard ETFs that look ready to outperform the S&P 500 in 2025. These ETFs have outperformed over the long run, and that trend should continue.
Key Points
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VUG and VGT are two Vanguard ETFs that look like they will outperform the S&P 500 this year.
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Both of these funds have long histories of beating the S&P 500, and they have low expense ratios too.
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Vanguard Growth Index Fund ETF (VUG)
The Vanguard Growth Index Fund ETF (NYSEARCA:VUG) is the first fund that is likely to outperform the S&P 500. They’re pretty much even to start the year, but a rally from big tech should help VUG take the lead.
VUG has delivered an annualized 17.2% return over the past five years and has an annualized 10-year return of 15.8%. Its portfolio mainly consists of the Magnificent Seven stocks, and its top 10 holdings make up 61% of its total assets. VUG has 51.6% of its assets in the tech sector.
The fund is also very affordable. It only has a 0.04% expense ratio that goes along nicely with the fund’s 0.42% SEC yield. The yield alone covers the expense ratio, and you can also get steady long-term returns if VUG sticks with its historical trends.
Vanguard Information Technology ETF (VGT)
The Vanguard Information Technology ETF (NYSEARCA:VGT) is another Vanguard ETF that is likely to outperform the S&P 500 this year. Just like VUG, this ETF also has a strong focus on the Magnificent Seven stocks. The fund’s top 10 holdings make up 60% of its total assets. VGT has 25 holdings that are all in the tech sector.
It’s been a good formula for VGT’s success. The ETF’s shares have an annualized 19.5% return over the past five years and an annualized 10-year return of 20.8%. The fund has a 0.09% expense ratio and a 0.47% SEC yield.
VGT is roughly flat to start the year, but that’s largely due to the market’s reaction to DeepSeek. While the S&P 500 has a year-to-date lead, VGT has had a higher return over the past year and over the past five years.
The post Prediction: These 2 Vanguard ETFs Will Beat the S&P 500 in 2025 appeared first on 24/7 Wall St..
