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Some growth ETFs are riskier than others, but all funds aim for higher long-term returns.
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From tech-focused funds to large-cap growth ETFs, these investments can grow your returns.
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However, it’s important to consider your risk tolerance before purchasing.
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10 stocks we like better than the Vanguard Information Technology ETF ›
Growth ETFs aim to achieve above-average returns over time, and the right fund can increase your returns.
While it’s impossible to know where the market will go in 2026, these three Vanguard ETFs have historically outperformed other funds S&P 500 Index (SNPINDEX:^GSPC) for several years. If they continue to achieve similar returns, these ETFs could crush the market in the future.
this Vanguard S&P 500 Growth ETF (NYSE: VOOG) Tracks the S&P 500 Index. However, it does not include all stocks in the index, but only those with the highest long-term growth potential. This increases the likelihood of above-average returns over time.
In fact, over the past 10 years, this ETF has returned an average of 16.69% annually – compared to Vanguard S&P 500 ETFof (NYSE: VOO) The average annual return at that time was 14.58%.
The Vanguard S&P 500 Growth ETF relies heavily on technology stocks, which has helped drive its faster growth over the past decade. If tech stocks continue to boom in the coming years, the fund could rise even further.
this Vanguard Mega Cap Growth ETF (NYSE: MGK) What’s unique about it is that it’s only targeted at very large companies. While large-cap stocks have a market capitalization of more than $10 billion, megacap stocks are generally defined as stocks with a market capitalization of at least $200 billion.
This ETF contains only 66 stocks, making it more niche and less diversified than the S&P 500 Growth ETF. However, this narrower approach also leads to higher returns because it focuses more on large-cap, high-performing growth stocks.
Over the past 10 years, the ETF has averaged annual returns of 18.08%. Over the past three years, it has gained even more, with average annual returns of a staggering 30.55%. Keep in mind that while its narrow approach can be an advantage in some ways, it can also lead to greater short-term volatility.
Investing in industry-specific funds can be a smart way to gain exposure to specific market sectors, andhe Pioneer Information Technology ETF (NYSE: VGT) Contains 322 stocks from various sectors of the technology industry.
Nearly one-third of this ETF is allocated to semiconductor stocks, which play a major role in the development of artificial intelligence (AI). If artificial intelligence continues to soar in the coming years, this ETF could help investors invest in the space with less risk than buying individual stocks.
The ETF has also seen significant gains in recent years as technology stocks have soared. Over the past 10 years, the fund has averaged annual returns of 22.18%, beating the S&P 500 Growth ETF and Mega Cap Growth ETF in that time.
However, higher earning potential often comes with greater risk. While the fund’s investments in the technology sector are well diversified, with more than 300 stocks, it’s still focused on just one industry. If you choose to buy, make sure the rest of your investments are spread across other sectors of the market to reduce risk.
Again, no one knows where the market will be in a year or two, and all three ETFs are more prone to volatility during market downturns. Therefore, it’s wise to maintain a long-term outlook and be prepared to hold investments for at least five to ten years to mitigate the impact of potential volatility.
That said, if these ETFs continue to deliver returns consistent with their 10-year averages, they could be incredibly profitable in the future. If you invested $200 a month in the Vanguard S&P 500 ETF rather than any of these three growth funds, here’s roughly how much you might accumulate over time.
|
years |
Total Portfolio Value: Average VOO – 14.58% Annual Return |
Total Portfolio Value: VOOG – 16.69% Average Annual Return |
Total Portfolio Value: Average MGK – 18.08% Annual Return |
Total Portfolio Value: Average VGT – 22.18% Annual Return |
|---|---|---|---|---|
|
15 |
$110,000 |
$131,000 |
$147,000 |
$208,000 |
|
20 |
$234,000 |
$301,000 |
$355,000 |
$584,000 |
|
25 |
$478,000 |
$667,000 |
$833,000 |
$1,608,000 |
Data source: Author’s calculations via Investor.gov.
When investing in high-risk ETFs, there’s always the chance that they will underperform — especially in the short term. However, if the tech sector continues to boom and growth stocks experience significant gains, these ETFs could be very profitable over time.
The right investments can help build lifetime wealth, and growth ETFs have a better chance of earning above-average returns. If you’re willing to take on more risk in exchange for potentially higher returns, these three Vanguard funds can help you beat the market in 2026 and beyond.
Before buying shares of the Vanguard Information Technology ETF, consider the following factors:
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Katie Brockman holds positions in Vanguard Admiral Funds-Vanguard S&P 500 Growth ETF, Vanguard Information Technology ETF and Vanguard S&P 500 ETF. The Motley Fool owns and recommends the Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
Prediction: These 3 Vanguard ETFs Could Crush the S&P 500 in 2026 and Beyond Originally published by The Motley Fool