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Globe and Mail
3 days ago
- Business
- Globe and Mail
2 Unstoppable Vanguard ETFs That Have Doubled in Just 5 Years
Investing in exchange-traded funds (ETFs) is usually associated with safe and stable long-term investing. But not all ETFs are the same. And just because you invest in one doesn't mean you can't still earn a great return. Two ETFs that have produced some fantastic returns for investors in the past five years are the Vanguard Information Technology Index Fund ETF (NYSEMKT: VGT) and the Vanguard Growth Index Fund ETF (NYSEMKT: VUG). Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Here's why these funds have performed so well, and why it may not be too late to invest in them today. Vanguard Information Technology Index Fund ETF This Vanguard ETF invests broadly within the tech sector. It has more than 300 stocks in its portfolio, giving exposure to companies involved with semiconductors, application software, electronics components, and many other areas of tech. And with tech stocks surging in value in recent years due to the excitement surrounding artificial intelligence (AI), it's perhaps not too surprising to learn that this ETF has risen by 135% in the past five years. And that rises to around 141% when you include the fund's dividend. By comparison, the S&P 500 's total returns (which include dividends) are 109% over that period. While the past five years have been good ones for the market as a whole, tech stocks have done particularly well. Given the strong trends in AI and the investments that continue to flow into AI-related projects, this ETF can still be an excellent option for your portfolio. While it's by no means a pure AI investment, the stocks within this ETF can all benefit from trends related to it as tech spending as a whole is likely to increase as companies invest in next-gen technologies and upgrade their existing infrastructure. The fund also charges a modest expense ratio of 0.09%, which can be crucial in ensuring that fees aren't taking a big chunk of your returns. Most of the stocks in the ETF account for no more than 4% of its total holdings, with the exception being the big three: Apple, Microsoft, and Nvidia, which together make up nearly 46% of the fund's portfolio. But given their leading positions in tech, how these stocks go, other tech stocks are likely to follow, anyway. If you're looking for a long-term investment and don't mind the volatility that can sometimes come with tech stocks, the Vanguard Information Technology Index Fund can be an excellent ETF to buy and hold for years. Vanguard Growth Index Fund ETF For a more balanced option outside of just tech, you may want to consider the Vanguard Growth Index Fund ETF. It simply focuses on the largest growth stocks in the country. It is, however, a bit more concentrated since it has positions in 166 stocks (as of April 30). While tech stocks take up the bulk of the portfolio at more than 57% of the ETF's holdings, it also has a strong position in other sectors. Consumer discretionary stocks account for 19% of its portfolio, and industrials make up close to 10%. This ETF has also delivered market-beating returns for investors, but with less focus on tech, the gap between it and the S&P 500 hasn't been as significant as has been the case with the Vanguard Information Technology ETF. ETF Returns data by YCharts. The same top three stocks that make up the bulk of the Vanguard tech fund are also the top three in this ETF. But in the Vanguard Growth ETF, Apple, Microsoft, and Nvidia combine for around 31% of its holdings. Having less exposure to these big three stocks helps explain why the fund's performance hasn't been as strong as the other Vanguard ETF listed here. However, that also means more diversification for investors and potentially less risk in the long run. The more diversified Vanguard Growth Index Fund ETF, which charges a lower expense ratio of 0.04%, can be a better option for more risk-averse growth investors who don't necessarily want to be all-in on tech. Should you invest $1,000 in Vanguard Index Funds - Vanguard Growth ETF right now? Before you buy stock in Vanguard Index Funds - Vanguard Growth ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard Index Funds - Vanguard Growth ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor 's total average return is978% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025 David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Vanguard Index Funds-Vanguard Growth ETF. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Yahoo
26-04-2025
- Business
- Yahoo
Have $0 in Savings? Here's How Much You Should Aim to Invest Each Month If You Want to End Up With a $1 Million Portfolio by Retirement.
Everyone has to start somewhere when saving for retirement. Even if you don't have any money saved up today, it's possible to build up a strong nest egg by the time you retire, potentially even $1 million. Through the power of compounding and investing, you can grow your savings at far higher levels than if you were to just accumulate money in a bank account. What's important, however, is to have a plan and know how much you may need to invest regularly in order to achieve your goals. Below, I'll show you what amount you may want to aim to invest each month, based on your age and years until retirement, in order to end up with a portfolio of at least $1 million by the time you retire. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » If you're investing for a period of 20-plus years, then you'll likely be far better off going with growth stocks than dividend stocks. The latter are more suitable when you're older, closer to retirement, and want to keep your risk relatively low. The former, however, can produce much better gains over the long run but come with much greater uncertainty and risk in any individual year. As long as you're in it for the long haul and can stomach any bad years along the way, the payoff can be well worth it. Rather than picking growth stocks yourself, there are many exchange-traded funds (ETFs) you can invest in that will give you exposure to many of them. One popular option for growth investors is the Vanguard Growth Index Fund ETF (NYSEMKT: VUG). This has been a market-beating fund to own over the past decade, with its total returns (which include reinvested dividends) up more than 240%. The past doesn't predict the future. But odds are, by sticking with growth stocks, you'll be putting yourself in an excellent position to achieve some terrific returns in the years ahead. The VUG ETF holds more than 160 of the U.S.'s largest growth stocks, including big names like Nvidia and Meta Platforms. Its constituent stocks have averaged an annual earnings growth rate of more than 26% over the past five years. The fund also charges a low expense ratio of 0.04%, which means fees won't take a big chunk out of your gains. In order to forecast how much you'll need to save and invest each month to be on track to retire with at least $1 million, you need to consider the number of years you have until retirement, as well as the average return that you'll achieve over that timeframe. You might have some control over the retirement number (in this example, I'm assuming you retire at age 65). But predicting an average return can be challenging, and that can make a significant difference in your overall returns and how much you might need to invest. Historically, the S&P 500 has averaged an annual return of around 10%. For the sake of being conservative, in the table below, I've shown you how much you'll need to invest monthly based on a 10% annual return, and also a 9% return, should the market slow down. Monthly Investment Needed to Get to $1 Million Age Years to Retire Average Annual Growth at 9% Average Annual Growth at 10% 45 20 $1,486 $1,306 40 25 $885 $747 35 30 $542 $439 30 35 $337 $261 Table and calculations by author. These numbers can seem high, but they don't need to be discouraging. You can invest tax refunds, inheritance, investment gains, and any other potential lump sum amounts to help accelerate your portfolio's growth. The more money you have invested, the more it will compound over time, and help you end up with a higher balance in the end. Knowing the amounts you might need can help you create a plan that aligns with your goals, and that doesn't set expectations too high or depend on a best-case scenario. Either way, trying to put aside a regular amount of money into growth-oriented investments can still help you build up a strong portfolio balance by the time you retire, even if you don't end up with $1 million. Before you buy stock in Vanguard Index Funds - Vanguard Growth ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard Index Funds - Vanguard Growth ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $680,390!* Now, it's worth noting Stock Advisor's total average return is 872% — a market-crushing outperformance compared to 160% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 21, 2025 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms, Nvidia, and Vanguard Index Funds-Vanguard Growth ETF. The Motley Fool has a disclosure policy. Have $0 in Savings? Here's How Much You Should Aim to Invest Each Month If You Want to End Up With a $1 Million Portfolio by Retirement. was originally published by The Motley Fool Sign in to access your portfolio
