In 2024, the Standard and Poor’s 500 (S&P 500) indicated 25 % returns.
By the time of the press on February 4, the index reached the level of 5994, after having gathered 1.92 % since the beginning of the year. Highway in the street believes that the index reaches 7100 in 2025 – a sign of an increase of 18.45 % over the current levels.
Investing in a wide indication fund that tracks the S&P 500 is not a bad step in any extension of the imagination.
You are a great degree of diversification – but there is a defect. Let’s face it – 500 stocks are a lot of stocks. Certainly, there will be many winners who fell into this wide net – but in general, your wallet performance will also be weighted by a ton of weak performance.
However, tendency to arrows can be the antidote to this. Vanguard, the second largest money supplier on the stock exchange (ETFS) behind Blackrock (NYSE: BLK) is a variety of investment vehicles-but in particular, showed a promising record when it comes to overcoming the S&P 500 in recent years.
Vanguard S & P 500 Growth ETF (NYSEARCA: VOOOG) follows the smaller S&P growth index. Voog has less than half of the S&P 500 – 208 holdings, accurately. These holdings are chosen based on three criteria – sales growth, profit change rate, and momentum.
Why can Vanguard ETF successfully acquire growth in 2025
VOOOG was created again in 2010. Since then, a 16.3 % annual growth rate (CAGR) has provided. On the other hand, the S&P provided a complex annual growth rate of 14.1 % in the same time frame.
Although the difference of 2.2 % does not seem much, the complex interest makes it important. The investment of $ 50,000 in the broader market fund in addition to Voog 10 years ago would have obtained completely different gains. The value of the broader market fund is now about $ 186,993 – while the Voog investment will reach about $ 226,343. This is $ 39,350 there – away from the amount from which one can mock.
There is a very simple explanation – with less than half of the S&P 500 holdings, Voog is highly weight towards the adult winners in the technology sector – NVIDIA (NASDAQ: NVDA), Apple (Nasdaq: Aapl), or Microsoft (Nasdaq: MSFT).
In fact, the three companies we have just mentioned represent more than a quarter of the fund’s holdings. If we expand our point of view to include Meta (Nasdaq: Meta), Amazon (Nasdaq: Amzn) and Tesla (NASDAQ: TSLA), we may represent 39.63 % of the box holdings.
Nowadays, there is no narration or trend in the dominant markets like artificial intelligence IS- This Vanguard ETF is well filled with capturing this growth while also providing investors with a large degree of diversification by exposure to other sectors such as the appreciation consumer and health care.
Distinctive image via Shutterstock
