vanguard

Even Warren Buffett, the greatest stock picker of all time, endorses low-cost, broad-market index funds and exchange-traded funds for most retail investors. This is because most investors don’t have the time to deeply research individual stocks, while broader-market indexes tend to win over time, with 8% to 10% long-term returns on average.

While large banks were the first to create index funds for their institutional clients, Vanguard was the first to offer diversified index funds to the public in 1976. Today, Vanguard is one of just a few major asset managers offering accessible, extremely low-cost index funds, costing investors just a handful of basis points in fees.

After the market’s strong recovery from April’s “Liberation Day” tariff fiasco, here’s the Vanguard fund I’d recommend today.

Buy the total market

Today, technology stocks, particularly around the AI buildout, have soared to very high valuations. Interestingly, some of the largest stocks in the world that have gone up the most, defying the law of large numbers, leaving large indexes like the Nasdaq-100 or even S&P 500 (^GSPC 0.53%) the most concentrated they’ve ever been in recent history.

Of course, there is a good reason why growth-oriented, large-cap technology stocks have soared over the past six months and even the last few years: artificial intelligence. The prospect of generative AI could very well lead to the next industrial revolution; meanwhile, only the largest, best-funded, most technically advanced companies likely have a chance to compete. Therefore, it’s no surprise the “Magnificent Seven” stocks only seem to be getting stronger.

That being said, valuation matters, and the widening gulf between the largest tech stocks and smaller stocks in other sectors is huge. Furthermore, once AI technology is honed and widely distributed, every business in every sector of the economy should be able to benefit from GenAI.

So while investors shouldn’t abandon AI tech stocks en masse, now would also be a good time to look at other types of stock in left-behind sectors. That makes this Vanguard ETF an excellent choice today.

Image source: Getty Images.

Vanguard Total Stock Market Index Fund

The Vanguard Total Stock Market Index Fund (VTI 0.51%) is my recommendation for index investors looking to put money to work today. As the name implies, this index tracks the entire stock market, including large-, mid-, small-, and even micro-cap stocks — the entire investing universe in the U.S.

Of course, a broad-market index will also have high weightings of the large-cap tech stocks discussed. Yet while investing in the total market index fund will still give investors some exposure to the AI revolution, those stocks will have a smaller weight than other index funds, such as the Vanguard S&P 500 ETF (VOO 0.60%). For instance, in the VTI, the largest stock in the market, Nvidia, has a 6.5% weighting, whereas Nvidia sports a 7.8% weighting in the VOO, which tracks the S&P 500, and a 9.9% weighting in the Invesco QQQ Trust (QQQ 0.73%), which tracks the Nasdaq-100.

Meanwhile, the total market fund will give a larger weight to smaller stocks in other cheaper sectors of the economy, which may outperform if there is a rebalancing and reversion to the mean. This is what happened in the early 2000s, when technology stocks crashed over the course of three years, but cheaper value stocks in other sectors of the market went on to outperform.

Currently, the VTI trades at a weighted average 27.2 times earnings, with a 1.14% dividend yield. It has risen 13.9% year to date, which is a strong performance, albeit behind that of the VOO and QQQ. Its expense ratio is 0.03%, which is so minuscule the fund is practically free.

Torn between momentum and value? Buy everything

The VTI is therefore a nice middle ground between those who are enthusiastic about the general prospects for AI technology, but are squeamish about tech stocks’ sky-high valuations relative to lower-priced sectors today. Therefore, it’s a great choice for investors looking to allocate money to stocks in October as part of their investment plan.

Exchange-traded fund (ETF) investing removes the guesswork from portfolio construction. Rather than researching dozens of companies and hoping your picks outperform, ETFs deliver instant diversification across hundreds or thousands of stocks with a single purchase. The costs stay low — often just a few dollars per $10,000 invested each year — and ETFs eliminate the mistakes that hurt individual stock pickers who panic during market drops or chase hot stocks at the wrong time.

Among fund families, Vanguard deserves special attention. Fund investors actually own the management company itself, which means Vanguard works for shareholders instead of outside profit-seekers. This setup keeps costs far below what most competitors charge. Lower costs mean more money stays in your account, and those savings add up to significantly higher returns over decades.

Image source: Getty Images.

Three Vanguard ETFs stand out as core holdings for investors building wealth over time. Here’s a brief overview of each fund and how it may fit into a well-diversified portfolio.

The everything U.S. stock fund

Vanguard Total Stock Market ETF (VTI 0.47%) tracks nearly 100% of the investable U.S. equity market through ownership of roughly 3,500 stocks spanning large-cap giants down to tiny specialists. The fund captures the full range of American business — from Nvidia powering the artificial intelligence (AI) revolution at 6.5% of assets to small regional banks and industrial firms that barely move the needle individually but collectively represent substantial economic activity.

The Vanguard Total Stock Market ETF sports an expense ratio of just 0.03% annually while delivering a 1.11% annualized yield and 14.7% average returns over the past 10 years. That outstanding performance reflects the advantage of owning everything rather than trying to pick winners.

Furthermore, the fund automatically adjusts as companies grow or shrink, ensuring Microsoft and Apple earn their positions through market performance rather than manager guesswork. For investors seeking one fund that covers the entire U.S. market, the Vanguard Total Stock Market ETF delivers complete coverage at rock-bottom cost.

The global diversification play

Vanguard Total International Stock ETF (VXUS 0.86%) covers what U.S.-only portfolios miss. The fund holds over 8,600 stocks from developed and emerging markets outside the U.S., creating exposure to economies and industries where American companies operate less.

Top holdings include Taiwan Semiconductor Manufacturing at 2.46% — the world’s leading chip manufacturer — along with Chinese tech giants Tencent and Alibaba, European leaders like ASML and SAP, and thousands of mid-sized firms across Asia, Europe, and Latin America.

The Vanguard Total International Stock ETF costs just 0.05% per year, delivers a 2.78% yield that runs well above most domestic funds, and has posted 8.4% average annual returns over the past 10 years. International stocks have trailed U.S. returns recently, but these markets trade at cheaper prices and offer diversification benefits when domestic momentum eventually reverses.

The fund’s massive holding count prevents too much concentration in any single company, while the higher yield provides current income that can be reinvested or spent. For portfolios weighted too heavily toward U.S. stocks, this fund provides geographic balance.

The technology concentration play

Vanguard Information Technology ETF (VGT 0.77%) narrows its focus to the main sector driving market returns — technology. The fund holds roughly 316 stocks classified under information technology — software, hardware, semiconductors, and IT services — with Nvidia, Microsoft, and Apple combining for about 44% of total assets. That concentration creates higher ups and downs but also captures the ongoing shift toward digital infrastructure, AI, and cloud computing that defines modern economic growth.

The Vanguard Information Technology ETF charges 0.09% annually, yields just 0.4% as tech companies reinvest cash into growth rather than paying dividends, and has delivered exceptional 23.4% average annual returns over the past 10 years. That performance reflects tech dominance — technology now makes up roughly 30% of the benchmark S&P 500, and this fund provides pure exposure without watering it down with utilities or consumer staples.

The risk comes from concentration. When tech sells off, this fund falls harder than diversified alternatives. But for investors who believe software continues taking over more industries and AI represents real change rather than hype, this fund offers direct access to the companies building that future.

Vanguard has built a business with the long-term investor in mind. Investors in its funds aren’t just clients, but part owners of the company. That’s why it has some of the lowest fees in the industry, as it passes profits on to its investors through lower fees on its funds.

You can buy and hold most Vanguard funds forever. A great pairing is the Vanguard Total Market Index (VTI -2.69%) and the Vanguard Total Bond Market ETF (BND 0.40%), as together they cover both major asset classes: stocks and bonds. With these two ETFs, you can build a simple 60/40 portfolio — $60 into VTI and $40 into BND for every $100 invested. Here’s why this is an ideal combination for long-term investors.

Image source: Getty Images.

The 60/40 portfolio

Investing in stocks is a great way to grow your wealth over the long term. However, stocks can be volatile. That’s why most financial advisors recommend that investors further diversify their portfolio by adding some bonds into the mix.

We can see how increasing a portfolio’s allocation to bonds can steadily lower the risk of having a terrible year:

Data source: Vanguard. NOTE: Return calculations from 1926 through 2024.

The sweet spot has historically been the 60/40 mix. It offers an attractive return (8.8% annually) while significantly reducing volatility and risk.

Broad exposure to the U.S. stock market

The Vanguard Total Stock Market ETF is one of the simplest ways to invest in the stock market. It tracks the CRSP US Total Market Index, which measures the performance of all stocks on the major U.S. exchanges. The fund currently holds over 3,500 stocks, providing investors with broad exposure to the entire U.S. market.

It doesn’t buy the same amount of every single stock. It holds more of the largest companies by market cap. Its top five holdings currently are:

1. Nvidia (6.5% allocation)
2. Microsoft (6.1%)
3. Apple (5.6%)
4. Amazon (3.5%)
5. Meta Platforms (2.6%)

That allocation provides greater exposure to the largest and most dominant companies in the country.

This ETF has produced solid returns throughout its history:

Data source: Vanguard.

As the chart shows, the fund’s returns have closely tracked those of the benchmark index it follows. That’s due to its ultra-low ETF expense ratio of 0.03%. At that rate, it would only cost you about $0.02 in management fees each year for every $60 you invest in the fund.

Broad exposure to the U.S. bond market

The Vanguard Total Bond Market Fund provides investors with broad exposure to the taxable investment-grade, U.S. dollar-denominated bond market. The fund holds high-quality bonds issued by the U.S. government, corporations, and foreign entities. It excludes tax-exempt bonds (e.g., municipal bonds), inflation-protected bonds (e.g., I-Bonds and TIPS), and non-investment-grade bonds (e.g., junk bonds).

This fund currently holds nearly 11,400 bonds with varying maturities (averaging over eight years) from numerous issuers, including U.S. Treasury securities, government-backed mortgages, corporations, and foreign entities.

Bonds provide investors with several benefits. They generate fixed income from bond interest payments (BND currently has a yield of more than 4%). They also help diversify a portfolio, thereby lowering its risk profile.

However, bonds do have much lower returns compared to stocks, especially in more recent decades due to lower interest rates:

Data source: Vanguard.

This ETF also does an excellent job of mirroring the returns of its benchmark, thanks to its ultra-low fees (0.03% ETF expense ratio). At that rate, you’d only pay $0.01 per year in fees for every $40 invested in the fund. The low fees enable investors to keep more of the interest income generated by the bonds held by the fund.

A great pairing

These two Vanguard ETFs complement each other well, offering a balanced approach between risk and reward. The Vanguard Total Stock Market ETF provides broad exposure to the U.S. stock market, while the Vanguard Total Bond ETF offers access to high-quality U.S. dollar bonds. This combination enables investors to participate in the growth of stocks while receiving income and stability from bonds. Investing $100 in these two Vanguard ETFs is a truly set-and-forget investment strategy.

Exchange-traded funds (ETFs) are one of the best investments for those looking for lower-effort ways to get involved in the stock market, and the right investment can help you build long-term wealth while barely lifting a finger.

But with some investors worried about potential volatility, it can be tough to choose the right ETF. While there’s no single best investment for every portfolio, there are a few good reasons why the Vanguard High Dividend Yield ETF (VYM -2.00%) could be a great buy in 2025.

Image source: Getty Images.

1. Its diversification can help limit risk

The Vanguard High Dividend Yield ETF contains 579 stocks, which are fairly evenly allocated across 10 different industries. It’s most heavily allocated to the financials sector, representing close to 22% of the fund.

This level of diversification can help mitigate risk. In general, the more stocks you own across a wider variety of industries, the safer your portfolio will be. There are limits to diversification, but if you’re investing in hundreds of stocks across 10 industries, your portfolio won’t be crushed if a handful of stocks or even an entire sector is hit hard in a market downturn.

One thing that makes this fund somewhat different from many other ETFs is its lighter allocation toward tech stocks at only 12% of the fund — compared to, for example, the Vanguard S&P 500 ETF, which devotes over 33% of the fund toward tech.

Tech stocks often deliver higher returns than those from other sectors, but they can also be highly volatile. Relying less on this industry can help reduce risk and short-term turbulence, which can be a major advantage in periods of uncertainty.

2. It offers consistent performance

This ETF won’t experience the same returns as, say, a high-powered growth ETF, and that’s OK. Each fund has its own unique strengths and weaknesses, and the High Dividend Yield ETF’s biggest strength is consistency.

All the stocks in this fund have a history of delivering high dividend yields year after year. Companies with strong dividend payouts are often more mature and established than their younger and more volatile counterparts, as the latter are generally more focused on growing and stabilizing the business than paying out dividends.

This doesn’t mean that these companies won’t face shakiness in the near term, especially during a market downturn. But many of the stocks in this ETF have a decades-long track record of recovering from even the most severe economic rough patches while still paying out consistent dividends to shareholders.

3. Its high dividend can generate passive income

Perhaps the biggest advantage of investing in a dividend ETF is the dividend income itself. This fund most recently paid out a quarterly dividend of around $0.84 per share, and while that may not sound significant, it adds up when you accumulate dozens or hundreds of shares over time.

Dividend ETFs can be particularly strong investments during periods of market uncertainty. Besides the general consistency and diversification that this fund offers, you can also rely on it as a steady source of passive income via dividend payments. While you can reinvest those dividends back into the fund, you can also choose to cash them out each quarter for some extra income.

High-yield dividend funds specifically are designed to pay higher dividends compared to other stocks and ETFs. If you’re looking to grow a stable stream of passive income, the Vanguard High Dividend Yield ETF can help you get there.

It’s unclear where the stock market may be headed throughout the rest of 2025. But during periods of uncertainty, investing in a dividend ETF can help keep your portfolio more protected, regardless of what’s coming.

Vanguard has a long history of offering a variety of great exchange-traded funds (ETFs) that not only give you exposure to a variety of investments, but also do it at a a very low cost. Most of Vanguard’s ETF charge industry-low expense ratios, allowing you to keep more of the investment returns you make.

But which Vanguard ETFs should you consider, if you’ve got $1,000 to invest today? Here are three great options — including one that’s one of my top holdings.

Image source: Getty Images.

1. Vanguard S&P 500 ETF: Buy a whole basket of stocks

Legendary investor Warren Buffett recommends that most investors put their money into S&P 500 index funds because they provide exposure to the biggest companies and do so at a very low cost. He even went so far as to recommend one such fund in a Berkshire Hathaway annual letter, noting, “I suggest Vanguard’s.”

Buffett was referring to the Vanguard S&P 500 ETF (VOO 0.59%), which invests in stocks in the S&P 500 and has the goal of closely tracking the index’s returns. This fund is personally one of my largest holdings and is a great option for investors who want to put money into stocks but would rather not have to make regular changes to their investment strategy.

Aside from being a great way to invest in a wide variety of stocks across all sectors, you’ll get the added benefit of one of the cheapest expense ratios available. The Vanguard S&P 500 ETF charges just 0.03% in annual fees, which works out to be just $0.30 for every $1,000 invested.

2. Vanguard Information Technology ETF: Ride the tech wave

The Vanguard Information Technology ETF (VGT 0.25%) is designed for investors who want to focus their investment strategy on technology companies, while still spreading out some of the risk. The fund tracks the MSCI US Investable Market Information Technology 25/50 index, which includes more than 300 small- and large-cap technology companies.

That’s important because it means the Vanguard Information Technology ETF helps you invest in some of the leading artificial intelligence stocks of today — including Nvidia and Palantir — while also giving you exposure to the smaller tech companies that could become big players in the coming years. The fund also charges a very reasonable annual expense ratio of just 0.09% — equal to $0.90 for every $1,000 invested — allowing you to keep more of the returns you make.

3. Vanguard Growth ETF: Grow with the biggest companies

If you want to focus your investments on more growth stocks, then the Vanguard Growth ETF (VUG 0.48%) may be the right fund for you. This ETF tracks the performance of the CRSP US Large Cap Growth Index and includes more than 300 of the largest U.S. growth stocks.

Growth stocks are often technology-focused in the U.S., so you’ll have plenty of exposure to trends like AI and cloud computing — through companies including Nvidia — but you’ll also have exposure to consumer stocks, including Eli Lilly. You’ll also pay a low annual fee of just 0.04% with the Vanguard Growth ETF, far less than the average 0.93% similar funds charge.

Just remember that in order for these ETFs to work their magic, you’ve got to hold onto them for the long haul. Dipping in and out of these funds won’t do you much good — the real gains will come as you hold them (and buy more) through boom and bust cycles.

More details have emerged about the Northrop Grumman’s Beacon program, an effort to bring autonomous flight software more rapidly into the air. It will use Scaled Composite’s Model 437 Vanguard in modified form as a testbed. This aircraft recently flew for the first time in its new Beacon configuration. You can read more about the Model 437 in these previous TWZ stories.

At the Air, Space & Cyber Conference in National Harbor, Maryland, Tom Jones, the president of Northrop Grumman’s Aeronautics Systems division, announced that the Model 437 Vanguard testbed aircraft had made its first flight after being adapted for the Beacon program earlier this week.

In the past, Scaled Composites provided the following general details about the original Model 437 configuration, which was something of a crewed surrogate for the company’s Model 437 unmanned collaborative combat aircraft concept:

“The Model 437 began as a conceptual design, based on the Model 401, exploring a multi-mission low-cost attritable aircraft. The Model 437 Vanguard is a crewed variant of the original concept powered by a single Pratt & Whitney 535 engine with approximately 3,400 pounds of thrust. The aircraft has a wingspan of 41 feet and is 41 feet long with a gross takeoff weight of 10,000 pounds. After completion of envelope expansion, the Model 437 Vanguard will have a range of approximately 3,000 nautical miles and an endurance of six hours. The aircraft can carry up to 2,000 pounds of payload in multiple locations, including an internal weapons bay sized to accommodate two AIM-120s.”

The Model 437’s Beacon modifications makes it more capable of optionally autonomous and optionally crewed flight using new software payloads. When it comes to optionally crewed aircraft, Scaled Composites has a wealth of experience in this field, including its Firebird surveillance aircraft. 

Prior to this latest milestone, the company had spent nine months reworking the jet’s avionics and power systems so that they could interface with new autonomous controllers.

The Beacon program, which was originally unveiled in June has Northrop Grumman partnered with six defense tech companies: Applied Intuition, Autonodyne, Merlin Labs, Red 6, Shield AI, and SoarTech.

The thinking behind Beacon is to develop an open-access testbed ecosystem, combining flight hardware (and some software) from Northrop Grumman together with software provided by the six partners. The result will provide “an integrated environment that mimics relevant mission scenarios,” helping yield autonomous flight-software solutions.

By “using Northrop Grumman’s flight hardware, proven autonomous flight software and integration expertise, third-party partners can test and refine their solutions through an open-access approach aligned to government requirements,” Northrop Grumman added in a press release when the program was announced earlier this summer.

Essentially, the baseline autonomous flight software from Northrop Grumman will ensure the aircraft can fly safely. This software is, in turn, open and modular, making it straightforward for the partner — and potentially others — to load and test their own autonomous mission software on top of it. This additional software will include technology that focuses on the tactical aspects of U.S. Air Force missions.

The six startups and smaller tech companies will be able to use the adapted Model 437 Vanguard to test their own autonomous technologies, something that would otherwise be beyond their reach or prohibitively expensive. Using Vanguard, testing could be carried out rapidly and affordably, according to Jones. He said the aircraft is cheap to fly and easy to maintain.

According to Tom Pieronek, chief technology officer at Northrop Grumman, the plan is for the Model 437 Vanguard to fly as frequently as possible, perhaps even completing multiple sorties each day. In fact, more than one autonomous mission software package can be installed in the aircraft at any one time, with the pilot using a cockpit tablet to switch between them in flight.

“Beacon is about collaboration across industry between companies of all sizes and expertise,” Jones said back in July. “By providing open access to the Beacon ecosystem, we’re enhancing the innovation, new competition, and ultimately the autonomous capabilities that industry can deliver to our customers — with unmatched speed and at scale.”

When new autonomous technology arrives, the plan is to be able to install it and test it in the aircraft rapidly.

“By being able to use open mission systems and standards and work things like Beacon, we can literally software define something today and test it tomorrow,” said Kevin Fesler, chief customer officer at Red 6. 

“The operative goal is not, ‘Can you get something done beautifully in 10 years? … ” added Jack Zaientz, vice president of C4I and autonomy at SoarTech. “It’s ‘go figure it out, talk amongst yourselves.’” 

At this stage, Beacon is being run using Northrop Grumman’s internal research and development funds.

Before the end of the year, the Model 437 Vanguard should be flown with Northrop Grumman’s own Prism autonomous flight software installed. Initially, a safety pilot will be in the cockpit, able to override the software if needed.

“This is optionally autonomous. The idea being, there are very rigorous rules around airworthiness and safety certification that potentially could stand in the road of rapid innovation in the field of bringing autonomy and AI to fruition for our warfighters,” Jones continued. “By being able to integrate test pilots with the solution and have the ability to always have that safeguard there, we’re able to very rapidly integrate.” 

Ultimately, the plan is for the Beacon program to prove autonomous flight software before feeding it into future aircraft programs, reducing risk in the development process.

One of the main programs that Beacon is expected to inform is the Air Force’s CCA effort, which seeks to field successive iterations of uncrewed combat tactical jets that feature a high degree of autonomy.

Also speaking at the Air, Space & Cyber Conference this week was Chris Gentile, general manager for Merlin Labs, one of the defense tech partners in Beacon. He specifically pointed to the need for an autonomous flight software testbed to help the CCA program.

In particular, as you can read all about here, there are questions about how the Air Force can best bridge autonomous and crewed formations while building trust in the autonomy. Overcoming this challenge is fundamental to achieving the aspiration of future crewed-uncrewed teaming.

“If you look at what venues I have as a performer in this space, as a nation, to test these things, it just doesn’t exist. There has been [only one] representative CCA flight ever in the United States, just two weeks ago, and that was primarily remotely operated — not autonomous in any way.”

CCA is not the only Air Force effort looking at bringing autonomy to its aircraft. The service has also been looking at the potential for autonomy in uncrewed cargo aircraft and aerial refueling platforms, to name just two. Jones has also said that he expects interest in Beacon from foreign customers, as well as the U.S. military. 

The U.S. Air Force is meanwhile also flying its own testbed for autonomous flight software, the X-62A Variable-stability In-flight Simulator Test Aircraft (VISTA), which you can read more about here. Aside from VISTA, other platforms are also now involved in developing autonomous technologies, including but not limited to the MQ-20 Avenger drone, adapted L-29 Delfin trainers, subscale drones, and actual CCAs.

More broadly, there is now a race underway to rapidly prove and improve autonomy models, something that we have discussed in the past in relation to Shield AI and General Atomics.

However, according to Dan Javorsek, president at AI firm EpiSci, the VISTA testbed is not up to the job of fully proving the kinds of technologies required to give CCAs, for example, the required level of autonomy.

Speaking at the same event, Javorsek described VISTA, as well as Project VENOM, in which the Air Force is outfitting six F-16s with autonomy agents, as “completely insufficient.”

“It turns out that to develop precisely the algorithms that you’re going to take into combat with you, you need a place and a playground to go and do this,” Javorsek said.

Under the Beacon program, the Model 437 Vanguard aircraft should be that “playground” testbed, with the key advantage of being optionally manned in a purpose-built platform, one that also represents a real CCA-like design. Now, with a first flight in its new configuration under its belt, it’s on the path to meeting its goals.

Contact the author: [email protected]

Investing in the stock market is one of the most surefire ways to build life-changing wealth, and the right investment can transform your savings.

Owning an exchange-traded fund (ETF) is a fantastic way to gain exposure to high-growth stocks with minimal effort on your part. A single ETF can contain dozens or hundreds of stocks, and you’ll own a stake in all of them by owning just one share of that fund.

If you’re looking for a high-powered ETF with a history of earning significantly above-average returns, the Vanguard Information Technology ETF (VGT 0.29%) could potentially turn just $100 per month into $2 million or more over time. Here’s how.

Image source: Getty Images.

A simple way to invest in tech stocks

The technology sector has a long track record of outperforming the market, and investing in a tech-focused ETF — like the Vanguard Information Technology ETF — can make it easier to invest in these stocks without having to research dozens of individual companies.

One of this ETF’s major strengths is its balance between industry-leading giants and smaller corporations. Around 44% of this fund is allocated to Nvidia, Microsoft, and Apple — the three largest holdings by a substantial margin. But it also contains an additional 313 stocks from all corners of the technology sector.

Major companies like Nvidia, Microsoft, and Apple are often more stable than their smaller counterparts. While they can still face significant volatility during economic rough patches, they’re very likely to recover and go on to see positive total returns over the long term.

Up-and-coming companies can be shakier than the industry titans, but these stocks also have more potential for explosive growth. If even one of them becomes the next tech powerhouse, investing now could set you up for substantial gains.

Building a $2 million portfolio

There are never any guarantees in the stock market, and past performance doesn’t predict future returns. That said, it can sometimes be helpful to look at historical returns to get an idea of roughly how much you might earn with a particular investment.

Over the last 10 years, the Vanguard Information Technology ETF has earned an average rate of return of more than 22% per year. For context, the market itself has earned an average return of around 10% per year over the last 50 years.

Again, this ETF may or may not continue earning 22% average annual returns. So to play it safe, let’s assume that going forward, you could earn either a 22%, 16%, or 11% average annual return. If you were to invest $100 per month, here’s approximately what you could accumulate over time.

Data source: Author’s calculations via investor.gov.

To build a portfolio worth $2 million or more, you’d need to invest consistently for around 30 years while earning returns in line with this ETF’s 10-year average. But even if you can’t invest that long or this fund underperforms in the future, you could still rack up hundreds of thousands of dollars over time.

Keep in mind, too, that if you decide to invest in this ETF, double-check that the rest of your portfolio is well-diversified. While this fund has a diverse assortment of tech stocks, investing in just one sector of the market — especially an industry as volatile as tech — increases risk.

Technology ETFs can supercharge your net worth with next to no effort on your part. By starting early and investing consistently, the Vanguard Information Technology ETF could turn small monthly contributions into millions.

The Vanguard Total Stock Market Index Fund ETF (VTI 0.21%) is one of the most popular exchange-traded funds (ETFs) on the planet. The fund has net assets of nearly $2 trillion.

With stock indexes hovering near all-time highs, many investors are worried that this historically successful ETF will struggle in the years to come. But there’s one critical piece of data that suggests otherwise.

This ETF remains a data-backed investment

The Vanguard Total Stock Market Index Fund ETF is a classic pick for savvy long-term investors. That’s because the ETF tracks the holdings of the CRSP US Total Market Index, which includes almost every type of company imaginable — everything from small-caps and large-caps to value stocks and growth stocks.

The ETF is incredibly diversified with more than 3,000 holdings, but investors should note that only U.S. companies are included. Many of those U.S. companies, however, have global operations, providing some level of international diversification.

Image source: Getty Images.

With an expense ratio of just 0.03%, the Vanguard Total Stock Market Index Fund ETF is one of the cheapest ways investors can get broad access to nearly the entire stock market. But with the indexes already at all-time highs, is this ETF still a smart pick? If your holding period is 20 years or more, the answer is absolutely. That’s because there has never been a 20-year period where the U.S. stock market has posted a negative return.

Of course, returns for any given 20-year period vary widely. But here’s a good example of how buying market indexes like this, even at their peaks, is a wise long-term decision. If you purchased shares of VTI in 2007 at their pre-cash peak, you still would have accumulated a 338% return over the next 18 years. So long-term investors can rejoice: The Vanguard Total Stock Market Index Fund ETF remains a solid pick for the decades ahead.

It’s probably safe to say that the world hasn’t seen a better capital allocator than Warren Buffett. His incredibly long track record running Berkshire Hathaway speaks for itself, as his investment prowess transformed the company into a $1 trillion conglomerate.

Average investors are right to listen to Buffett’s advice. And one of his recommendations is extremely simple. The Oracle of Omaha says to buy this Vanguard exchange-traded fund (ETF). It could turn a monthly $1,000 investment into $264,000 in a decade.

Image source: Getty Images.

Simple is best

Every investor wants to be like Buffett, picking individual businesses based on expert financial analysis skills. However, this is obviously not something everyone can do. Even professional money managers struggle to find success, with many funds lagging the overall market.

Buffett believes that most retail investors are better off taking a simpler approach. This means buying a low-cost ETF that tracks the performance of the S&P 500, such as the Vanguard S&P 500 ETF (VOO -0.56%). It carries an extremely low expense ratio of 0.03%, which is probably why Buffett is so supportive of it.

What’s more, investors are buying an ETF offered by a leading firm in the asset management industry that has been around since 1975. Vanguard had $11 trillion in total assets under management as of July 31, highlighting its tremendous scale and the amount of capital it’s trusted to handle.

The Vanguard S&P 500 ETF tracks the performance of the S&P 500. Investors in the fund get exposure to 500 large and profitable companies, with tech behemoths like Nvidia, Microsoft, and Apple having big weights. However, there is still broad diversification, as all sectors of the economy are represented.

Owning this ETF essentially means that investors are betting on the ongoing growth and ingenuity of the U.S. economy. That doesn’t mean there isn’t international exposure. Many of the companies in the S&P 500 generate revenues from overseas markets. This can be beneficial as other countries potentially register more growth than the U.S. in the long run.

Stellar performance

In the past decade, the S&P 500 has generated a total return of 304% (as of Sept. 19). On an annualized basis, this translates to a gain of 15%. It’s hard to complain with this performance, which has been driven by historically low interest rates, lots of passive capital flowing into the stock market, and the rise of massive tech companies.

If trailing-10-year returns (from August 2015 to August 2025) repeated over the next decade, investing $1,000 monthly into the Vanguard S&P 500 ETF would turn into $264,000 by September 2035. This proves that even small sums of money can result in huge returns over the long term.

This approach is considered dollar-cost averaging, and it works so well because investors are building a consistent habit of allocating capital to their portfolios. Plus, it lessens the importance of trying to correctly time the market, which is a losing proposition.

But to be clear, past returns provide no guarantee of future results. Looking out over the next decade, the Vanguard S&P 500 ETF could generate worse performance than it did since 2015. This is entirely in the realm of possibilities. One area of concern is the historically expensive valuation of the S&P 500, which might be one of the main reasons Buffett and Berkshire have been net sellers of stocks in recent years.

It’s best to have realistic expectations. While the returns could be great, it’s also possible that the S&P reverts back to its long-run average of 10% yearly gains. Either way, buying the Vanguard S&P 500 ETF on a monthly basis is perhaps one of the best things investors can do, at least in Buffett’s opinion.

It has been a remarkably strong decade for the S&P 500. In fact, a $1,000 investment in the low-cost Vanguard S&P 500 ETF (VOO -0.35%) a decade ago would be worth about $4,100 today, assuming you reinvested all of your dividends. That is an annualized return of about 15%.

Why has the S&P 500 had such a strong decade?

It’s worth noting that a decade ago, the S&P 500 had already more than tripled from the 2009 financial crisis lows. So, adding a 310% total return on top of that is no small feat.

VOO Total Return Price data by YCharts

The short explanation is that while most sectors have performed quite well, the bulk of the stellar performance has been largely fueled by large-cap technology stocks. After all, the trillion-dollar megacap tech stock wasn’t a thing back then, and now there are eight of them. To illustrate this, consider the five largest holdings of the Vanguard S&P 500 ETF and how each one has performed over the past decade:

Data source: yCharts, Vanguard. Percentages of assets as of 7/31/2025.

Think about this. The worst performer of the five largest megacap tech stocks in the S&P 500 outperformed the overall index by more than 250 percentage points over the past decade.

Image source: Getty Images.

Historically, the S&P 500 has delivered annualized returns in the 9% to 10% range over long periods, so it’s fair to say that this has been an incredibly strong decade for S&P 500 investors. And while there’s no way to predict what might happen over the next 10 years, it wouldn’t be realistic to expect 15% annualized returns over the long run forever.

Close to 40% of U.S. adults don’t believe they’ll ever be considered “wealthy” in their lifetime, according to a 2025 survey from Charles Schwab, and 27% don’t think they’ll be “financially comfortable” either.

While building wealth isn’t necessarily easy, investing in the stock market is one of the most effective ways to make a lot of money over time. Exchange-traded funds (ETFs) are a particularly good choice for those seeking a simpler way to generate wealth, as these investments require next to no effort on your part.

There are numerous ETFs to choose from, each with their unique advantages and disadvantages. However, there’s one Vanguard fund that can help you accumulate $1 million or more while also mitigating risk. Here’s how.

Image source: Getty Images.

A growth ETF with a proven track record

An ETF is a collection of stocks grouped together into a single fund. Some ETFs track major market indexes, while others follow particular sectors of the market or even more niche sub-sectors.

If you’re looking for an investment that can potentially make you a millionaire while also helping to protect against risk, the Vanguard S&P 500 Growth ETF (VOOG -0.79%) could be a fantastic option. It follows the S&P 500 (^GSPC -0.69%), but instead of containing stocks from all 500 companies within the index, it only includes the 213 stocks with the most potential for growth.

One of the primary advantages of this fund is its balance of risk and reward. The companies within the S&P 500 are among the largest and strongest in the U.S., and many are industry leaders with decades of experience navigating economic uncertainty. While there are no guarantees when investing, juggernaut businesses like those in the S&P 500 are more likely to survive periods of market turbulence.

At the same time, though, because this ETF only includes the stocks with potential for faster-than-average growth, you’re more likely to earn higher returns than you would with a standard S&P 500 ETF.

A downside to consider, however, is that with less diversification, this fund does carry more risk than a standard S&P 500 ETF. Growth stocks can often be more volatile than those from more established industries, and because this fund only contains stocks poised for significant growth, it could face more severe ups and downs than the S&P 500.

Accumulating $1 million or more

Nobody knows where the market will be in a few months or a year, so before you buy, be sure you’re willing to stay invested for at least five to 10 years — or, ideally, a couple of decades. The longer your timeline, the less you’ll need to worry about short-term volatility.

There are also no guarantees that any investment will continue to earn returns similar to what it has in the past, but historical returns can be a good starting point to see roughly how much you could potentially earn.

Over the last 10 years, the Vanguard S&P 500 Growth ETF has earned an average rate of return of 15.79% per year. For comparison, the Vanguard S&P 500 ETF has earned an average return of just 13.62% per year in that time.

Let’s say you were to invest $200 per month. Here’s approximately how much you could accumulate over time, depending on whether you’re earning a 15.79% or 13.62% average annual return:

Data source: author’s calculations via investor.gov.

The difference between 13% and 15% average annual returns may not seem like much, but it can add up to nearly half a million dollars over three decades. If you have even a few extra years to invest, you could earn exponentially more.

Investing in ETFs is a lower-effort way to generate wealth, as you never need to choose individual stocks or decide when to buy or sell. The Vanguard S&P 500 Growth ETF is a powerhouse fund that can help balance risk and reward, and with enough time, you could build a million-dollar portfolio while barely lifting a finger.

I won’t keep you in suspense. If you had invested $1,000 in the Vanguard Real Estate ETF (VNQ -0.51%) a decade ago, you would have about $1,770 today, assuming you reinvested your dividends along the way.

This isn’t a terrible outcome. After all, you wouldn’t have lost money. But when you consider that $1,000 invested in an S&P 500 index fund such as the Vanguard S&P 500 ETF (VOO -0.37%) 10 years ago would be worth $3,900, it doesn’t exactly look like stellar performance.

Image source: Getty Images.

What went wrong?

The short version is that the real estate sector underperformed the S&P 500 because, first, the S&P 500 has been on an incredible bull run. It has produced annualized total returns of about 14.6% over the past decade, making it touch to beat.

In addition, real estate is perhaps the most rate-sensitive sector of the market. Over the past 10 years, we’ve seen two prolonged periods of Federal Reserve rate increases, with a global pandemic in between. In fact, the benchmark federal funds rate is more than 400 basis points higher than it was a decade ago.

Real estate investment trusts (REITs) have a strong history of outperforming the market in falling rate or zero-rate environments but underperforming when rates are high or rising.

Without turning this into an economics lesson, there are a few reasons REITs are so sensitive to interest rates. One is borrowing costs. REITs tend to rely heavily on borrowed money to grow, similar to how you might rely on a mortgage to buy a home. Rising rates make the economics of borrowing less favorable.

In addition, rising rates put pressure on commercial real estate property values, which tend to have an inverse relationship with risk-free interest rates (those offered by Treasury securities). The properties REITs own can literally be worth less simply because rates went higher.

On the other hand, it’s worth noting that these things can also become real estate’s biggest catalysts in a falling-rate environment.

The largest growth-focused U.S. companies by market cap are Nvidia (NVDA 1.65%), Microsoft (MSFT 0.56%), Apple (AAPL 1.21%), Amazon (AMZN 3.12%), Alphabet (GOOG 2.98%) (GOOGL 3.10%), Meta Platforms (META 2.04%), Broadcom (AVGO 1.48%), Tesla (TSLA 6.18%), Oracle (ORCL 1.30%), and Netflix (NFLX -0.20%).

Known as the “Ten Titans,” this elite group of companies has been instrumental in driving broader market gains in recent years, now making up around 38% of the S&P 500 (^GSPC 1.52%).

Investment management firm Vanguard has the largest (by net assets) and lowest cost exchange-traded fund (ETF) for mirroring the performance of the index — the Vanguard S&P 500 ETF (VOO 1.46%). Here’s why the fund is one of the simplest ways to get significant exposure to the Ten Titans.

Image source: Getty Images.

Ten Titan dominance

Over the long term, the S&P 500 has historically delivered annualized results of 9% to 10%. It has been a simple way to compound wealth over time, especially as fees have come down for S&P 500 products. The Vanguard S&P 500 ETF sports an expense ratio of just 0.03% — or $3 for every $10,000 invested — making it an ultra-inexpensive way to get exposure to 500 of the top U.S. companies.

The Vanguard S&P 500 ETF could be a great choice for folks who aren’t looking to research companies or closely follow the market. But it’s a mistake to assume that the S&P 500 is well diversified just because it holds hundreds of names. Right now, the S&P 500 is arguably the least diversified it has been since the turn of the millennium.

Megacap growth companies have gotten even bigger while the rest of the market hasn’t done nearly as well. Today, the combined market cap of the Ten Titans is $20.2 trillion. Ten years ago, it was just $2.5 trillion. Nvidia alone went from a blip on the S&P 500’s radar at $12.4 billion to over $4 trillion in market cap. And not a single Titan was worth over $1 trillion a decade ago. Today, eight of them are.

S&P 500 Market Cap data by YCharts.

To put that monster gain into perspective, the S&P 500’s market cap was $18.2 trillion a decade ago. Meaning the Ten Titans have contributed a staggering 51.6% of the $34.3 trillion market cap the S&P 500 has added over the last decade. Without the Ten Titans, the S&P 500’s gains over the last decade would have looked mediocre at best. With the Ten Titans, the last decade has been exceptional for S&P 500 investors.

The Ten Titans have cemented their footprint on the S&P 500

Since the S&P 500 is so concentrated in the Ten Titans, it has transformed into a growth-focused index, making it an excellent way to double up on the Ten Titans. But the S&P 500 may not be as good a fit for certain investors.

Arguably, the best reason not to buy the S&P 500 is if you’re looking to avoid the Ten Titans, either because you already have comfortable positions in these names or you don’t want to take on the potential risk and volatility inherent in a top-heavy index.

That being said, the S&P 500 has been concentrated before, and its leadership can change, as it did over the last decade. The underperformance by former market leaders, like Intel, has been more than made up for by the rise of Nvidia and Broadcom.

So it’s not that the Ten Titans have to do well for the S&P 500 to thrive. But if the Titans begin underperforming, their sheer influence on the S&P 500 would require significantly outsized gains from the rest of the index.

Let the S&P 500 work for you

With the S&P 500 yielding just 1.2%, sporting a premium valuation and being heavily dependent on growth stocks, the index isn’t the best fit for folks looking to limit their exposure to megacap growth stocks or center their portfolio around dividend-paying value stocks.

The beauty of being an individual investor is that you can shape your portfolio in a way that suits your risk tolerance and investment objectives. For example, you use the Vanguard S&P 500 ETF as a way to get exposure to top growth stocks like the Ten Titans and then complement that position with holdings in dividend stocks or higher-yield ETFs.

In sum, the dominance of the Ten Titans means it’s time to start calling the Vanguard S&P 500 ETF what it has become, which is really more of a growth fund than a balanced way to invest in growth, value, and dividend stocks.

Investors with a high risk tolerance and long-term time horizon may cheer the concentrated nature of the index. In contrast, risk-averse investors may want to reorient their portfolios so they aren’t accidentally overexposing themselves to more growth than intended.