You Can Do Better Than the S&P 500. Buy This ETF Instead.

Motley Fool09-28 23:21

The Vanguard Information Technology ETF has significantly outperformed the S&P 500 over the past decade, often doubling its long-term returns. It is more concentrated in large tech stocks like ...

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Buy This ETF Instead.\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-28 23:21 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2024/09/28/you-can-do-better-than-the-sp-500-buy-this-etf-ins/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The Vanguard Information Technology ETF has significantly outperformed the S&P 500 over the past decade, often doubling its long-term returns.\n\n\n\n\n\n\n\nIt is more concentrated in large tech stocks like ...</p>\n\n<a href=\"https://www.fool.com/investing/2024/09/28/you-can-do-better-than-the-sp-500-buy-this-etf-ins/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"IE0009G5SDU7.USD","symbol_name":"PIMCO BALANCED INCOME AND GROWTH \"M\" (USD) INC","start_time":0,"source_url":"https://www.fool.com/investing/2024/09/28/you-can-do-better-than-the-sp-500-buy-this-etf-ins/","article_id":"2470025316","we_media_id":null,"thumbnails":["https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F792148%2Fgreen-and-blue-neon-lights-over-piles-of-money.jpg&op=resize&w=165&h=104"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2470025316","pubTimestamp":1727536860,"sourceInfo":{"source_id":"fool_stock","name":"Motley Fool"},"weMediaInfo":null,"summary":"If you're looking for an index fund that's anything but average, pay attention. This popular ETF has outpaced the S&P 500 over the long haul, despite some speed bumps along the way.","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"IE0009G5SDU7.USD":"PIMCO BALANCED INCOME AND GROWTH \"M\" (USD) INC","SH":"标普500反向ETF","IE00B19Z8X17.USD":"FTGF CLEARBRIDGE US LARGE CAP GROWTH  \"AG\" (USD) ACC","IE000ITXATA3.USD":"PIMCO BALANCED INCOME AND GROWTH \"M\" (USD) ACC","BK4503":"景林资产持仓","UPRO":"三倍做多标普500ETF","IE000YTNTUN2.SGD":"PIMCO BALANCED INCOME AND GROWTH \"M\" (SGDHDG)INC","OEF":"标普100指数ETF-iShares","AAPL":"苹果","SPY":"标普500ETF","IE0034235188.USD":"PINEBRIDGE GLOBAL FOCUS EQUITY \"A\" (USD) ACC","IVV":"标普500指数ETF","IE00BKVL7J92.USD":"Legg Mason ClearBridge - US Equity Sustainability Leaders A Acc USD","IE00BHPRN162.USD":"BNY MELLON BLOCKCHAIN INNOVATION \"B\" (USD) ACC","IE00B19Z8W00.USD":"FTGF CLEARBRIDGE US LARGE CAP GROWTH \"A\" INC","BK4581":"高盛持仓","BK4504":"桥水持仓","IE00BJTD4N35.SGD":"Neuberger Berman US Long Short Equity A1  Acc SGD-H","OEX":"标普100",".SPX":"S&P 500 Index","IE00B5949003.HKD":"JANUS HENDERSON GLOBAL TECHNOLOGY AND INNOVATION \"A\" (HKD) ACC","IE00B775SV38.USD":"NEUBERGER BERMAN US MULTICAP OPPORTUNITIES \"A\" (USD) ACC","BK4548":"巴美列捷福持仓","IE00BJJMRX11.SGD":"Janus Henderson Balanced A Acc SGD","IE0034235295.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"A\" (USD) ACC","IE00BFXG0V08.USD":"BNY MELLON GLOBAL LEADERS \"B\" (USD) ACC","IE00BJTD4V19.USD":"NEUBERGER BERMAN US LONG SHORT EQUITY \"A1\" (USD) ACC","IE00BDCRKT87.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"ADC\" (USD) INC","BK4532":"文艺复兴科技持仓","GB00BDT5M118.USD":"天利环球扩展Alpha基金A Acc","IE00B4YYXB79.USD":"PIMCO BALANCED INCOME AND GROWTH \"E\" (USD) ACC","FDN":"First Trust Dow Jones Internet I","BK4592":"伊斯兰概念","SPXU":"三倍做空标普500ETF","CAGR":"California Grapes International, Inc.","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD","BK4534":"瑞士信贷持仓","IE00BJLML261.HKD":"HSBC GLOBAL EQUITY INDEX \"HCH\" (HKD) ACC","IE00BKDWB100.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5H\" (SGDHDG) ACC","BK4533":"AQR资本管理(全球第二大对冲基金)","BK4159":"经销商","MSFT":"微软","SDS":"两倍做空标普500ETF","BK4525":"远程办公概念","VOO":"Vanguard标普500ETF","IE00B775H168.HKD":"JANUS HENDERSON BALANCED \"A5M\" (HKD) INC","SSO":"两倍做多标普500ETF","IE0004445015.USD":"JANUS HENDERSON BALANCED \"A2\" (USD) ACC","BK4527":"明星科技股","NVDA":"英伟达"},"translate_title":"你可以做得比标准普尔500更好。请购买此ETF。","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{".SPX":1,"VOO":1,"SPY":1,"FDN":1,"CAGR":1,"AAPL":0.7,"NVDA":0.7,"MSFT":0.7,"IVV":0.6,"OEF":0.6,"OEX":0.6,"SDS":0.6,"SH":0.6,"SPXU":0.6,"SSO":0.6,"UPRO":0.6,"ESmain":0.6},"content_text":"The Vanguard Information Technology ETF has significantly outperformed the S&P 500 over the past decade, often doubling its long-term returns.\n\n\n\n\n\n\n\nIt is more concentrated in large tech stocks like Apple, Microsoft, and Nvidia compared to broader market trackers.\n\n\n\n\n\n\n\nYou need an above-average risk appetite, but this thrilling fund tends to be worth a bit of extra risk in the long run.\n\nThere's nothing wrong with the S&P 500 (^GSPC -0.13%) market index.It reflects the overall health of the American stock market, with a quality filter based on market capitalization. Investing in this market tracker through exchange-traded funds (ETFs) like the SPDR S&P 500 Trust (SPY -0.14%) gives you a ton of diversification and sets you up for robust long-term returns.If you invested $1,000 in the SPDR fund 10 years ago and set the position up to reinvest dividend payments in more shares, you would have $3,500 today. That's a compound annual growth rate (CAGR) of 13.2%, leaving inflation rates far behind. Many investors get started in a popular SPDR 500 fund and let it run for decades, building wealth with zero investor effort.But what if I told you that there are ETFs with even better long-term returns? For instance, the Vanguard Information Technology ETF (VGT -0.74%) tends to beat the S&P 500's returns in the long haul. It's one of my favorite ETFs. Let me show you how it works.VGT total return price; data by YCharts.Why this Vanguard fund is one of my favorite ETFs for long-term growthAs you can see in the chart above, the Vanguard IT ETF has been crushing the S&P 500 and its index trackers over the last decade. The total returns work out to a CAGR of 20.9%. Over this period, a hypothetical $1,000 investment would have grown to $6,678.And that's just a simple one-time move with no further cash investments added over time. Let's imagine an automated dollar-cost averaging plan instead, starting with just $100 in the fall of 2014 and adding another $100 to that Vanguard IT ETF position per month. Some investors can do this as a paycheck deduction, others might set up automatic transfers, and a few may prefer doing it by hand.Whatever method you use, these fairly painless contributions would add up to $12,000 in a decade. The investment returns would be roughly $29,000, working out to a total investment value of $41,118.Doing the same thing with the SPDR S&P 500 fund instead would have yielded respectable results, too. The same $12,000 investment should be worth $25,174 by now, more than doubling your money in 10 years.Like I said, there's nothing wrong with that. Still, I'd rather have the stronger returns from the IT market tracker.There's no reward without additional risksOf course, I can't promise market-stomping returns over every conceivable time period. The fund underperformed the S&P 500 in its first five years on the market, ending amid the subprime market meltdown of 2008-2009. The inflation crisis of 2022 was no fun for Vanguard IT ETF investors, either.In challenging markets like these hand-picked examples, the ETF's focus on high-growth investment ideas can result in deeply negative returns. I had to search for these unfavorable examples, and this ETF tends to beat the S&P 500 over long time periods.Still, this might not be the fund for you if you can't afford the occasional price drop along the way. The fund outperforms in most cases, but it can really hurt when growth stocks run into a brick wall.How this ETF's portfolio differs from the S&P 500The fund follows a market index reflecting all American stocks in the information technology sector, resulting in a list of 317 names at the latest update.They are weighted by market cap. Therefore, tech titans Apple (AAPL 0.12%), Microsoft (MSFT -0.76%), and Nvidia (NVDA -2.13%) are the three largest holdings these days. These three stocks add up to roughly 48% of the total portfolio.The same three companies also dominate the S&P 500, but their combined weight stops at just 20% right now. The IT index includes many stocks that are too small for the S&P 500.So the IT-focused fund places a heavier load on the largest companies, but also lets smaller businesses contribute to the total score. It's a different balancing act that raises market risks but also the potential returns.Is the Vanguard Information Technology ETF right for you?You've seen the long-term returns, and I showed you the potential downsides. I don't mind if you prefer something like the SPDR S&P 500 ETF in the end. It will probably let you sleep better at night, at least in challenging periods like the market crises I highlighted earlier.I'm just happy to have shown you a more exciting option. The Vanguard Information Technology ETF isn't every investor's cup of tea, and that's OK. I highly recommend taking a sip, though. These thrilling high-growth ideas can be intoxicating over the long haul.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.28.1","shortVersion":"4.28.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2470025316"}