Forecast: This Dominant Vanguard ETF Set to Outperform the S&P 500 Once More in 2026

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Key Financial Insights

The Vanguard Growth ETF (NYSEMKT: VUG) has outperformed the S&P 500 (SNPINDEX: ^GSPC) in 2025, achieving a return of 19.2% compared to the S&P 500’s gain of 16.1%. Since its inception in 2004, the ETF has produced a compound annual return of 12.2%, surpassing the S&P 500’s average of 10.4% during the same period.

As of October 31, 2025, the Vanguard Growth ETF consists of only 160 stocks that account for 85% of the value in the CRSP U.S. Total Market index. The top five holdings—Nvidia, Apple, Microsoft, Alphabet, and Amazon—have a combined market capitalization of $18 trillion, showcasing the ETF’s focused investment strategy.

Looking ahead to 2026, demand for AI technology is projected to drive significant growth, with Nvidia CEO Jensen Huang estimating AI infrastructure spending could reach $4 trillion annually by 2030. The ETF’s high exposure to leading tech companies positions it favorably to continue outperforming the S&P 500.

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