This Spectacular Vanguard ETF Will Crush the S&P 500 in 2025

Generado por agente de IAHarrison Brooks
miércoles, 22 de enero de 2025, 6:07 am ET1 min de lectura
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As we approach 2025, investors are looking for opportunities to outperform the broader market. One ETF that stands out is the Vanguard S&P 500 Growth ETF (VOOG), which has the potential to crush the S&P 500 in the coming year. This ETF's focus on high-growth stocks, particularly in the tech sector, positions it well to capitalize on the continued momentum of trends like artificial intelligence (AI).

The Vanguard S&P 500 Growth ETF (VOOG) directly tracks the performance of the S&P 500 Growth index, which holds 233 of the best-performing growth stocks from the regular S&P 500. This focus on high-growth stocks is expected to continue in 2025, as trends like AI maintain their momentum. For instance, Morgan Stanley predicts that four companies alone—Microsoft, Amazon, Meta, and Alphabet—could spend a combined $300 billion on AI chips and infrastructure this year, which should benefit tech stocks like Nvidia (NVDA), a top holding in the ETF.

The ETF's large holdings in America's top tech stocks also contribute to its expected outperformance. As of November 30, 2024, the ETF's portfolio weightings included:

* Apple: 12.38% (VOOG) vs. 7.06% (S&P 500)
* Nvidia: 11.67% (VOOG) vs. 6.66% (S&P 500)
* Microsoft: 10.80% (VOOG) vs. 6.16% (S&P 500)

Historical performance also supports the ETF's potential to outperform the broader market. The Vanguard ETF has a compound annual return of 16.4% since its inception in 2010, compared to the S&P 500's 14.1% over the same period. This 2.3 percentage-point difference each year has led to a significant difference in dollar terms due to the effects of compounding. In 2024, the ETF delivered a return of 38%, more than double the S&P 500's 23% return.

In conclusion, the Vanguard S&P 500 Growth ETF (VOOG) is well-positioned to outperform the broader market in 2025 due to its focus on high-growth stocks, particularly in the tech sector. Its large holdings in America's top tech stocks and historical performance further support its potential to crush the S&P 500 in the coming year. Investors seeking higher returns and willing to accept the associated risks should consider allocating a portion of their portfolio to this ETF.

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