Consider investing in index funds for a comfortable retirement. Here are three top-performing options and their historical returns:
1. Vanguard S&P 500 ETF (VOO)
– 3-Year Avg. Annual Return: 10.55%
– 5-Year Avg. Annual Return: 15.91%
– 10-Year Avg. Annual Return: 13.57%
2. Vanguard S&P 500 Growth ETF (VOOG)
– 3-Year Avg. Annual Return: 8.75%
– 5-Year Avg. Annual Return: 18.42%
– 10-Year Avg. Annual Return: 15.60%
3. Vanguard Information Technology ETF (VGT)
– 3-Year Avg. Annual Return: 12.50%
– 5-Year Avg. Annual Return: 23.20%
– 10-Year Avg. Annual Return: 21.20%
Source: Morningstar.com as of Dec. 12, 2024.
While the S&P 500 index fund has shown impressive growth recently, the other two funds come with higher returns and risks. Investing in these low-fee ETFs can be beneficial for your long-term portfolio.
By investing $10,000 annually, here’s how much you could accumulate over time:
– Growing at 10% / 15%
– 10 years: $175,312 / $233,493
– 15 years: $349,497 / $547,174
– 20 years: $630,025 / $1,178,101
– 25 years: $1,081,818 / $2,447,120
– 30 years: $1,809,434 / $4,999,569
– 35 years: $2,981,268 / $10,133,457
– 40 years: $4,868,518 / $20,459,539
Source: Calculations by author.
The Vanguard S&P 500 ETF mirrors the S&P 500 index, offering diversification across 500 companies. Warren Buffett and many others recommend this fund for retirement savings. The top holdings include Apple, Nvidia, Microsoft, Amazon, and others.
The Vanguard S&P 500 Growth ETF focuses on faster-growing companies within the S&P 500. It aims to provide higher growth opportunities than a traditional S&P 500 fund.
Consider these index funds as part of your investment strategy for long-term financial growth.
The 00 index fund has a strong track record as a reliable long-term grower. Below are the latest top 10 holdings of the fund:
– Apple
– Nvidia
– Microsoft
– Amazon.com
– Meta Platforms
– Alphabet (Class A and Class C)
– Broadcom
– Tesla
– Eli Lilly
These holdings closely mirror the top 10 of the S&P 500, but each carries a larger weight in the fund due to its fewer components.
Moving on to the Vanguard Information Technology ETF, another sizable fund boasting 314 holdings as of the end of October. This ETF tracks an index representing the performance of stocks in the information technology (IT) sector. Here are its recent top 10 holdings:
– Apple
– Nvidia
– Microsoft
– Broadcom
– Salesforce
– Oracle
– Advanced Micro Devices
– Cisco Systems
– Adobe
– Accenture PLC
Notably, approximately 45% of the fund is allocated to the top three holdings mentioned above, with an additional 4.5% in Broadcom, and less than 2% distributed among the remaining holdings. Therefore, investing in this ETF requires substantial confidence in Apple, Nvidia, and Microsoft.
It is essential to devote time to crafting a robust retirement plan, and then remain committed to it by saving and investing diligently over the years. You may consider investing in one or more of the aforementioned ETFs, or explore other promising ETF options.
Should you be contemplating a $1,000 investment in the Vanguard S&P 500 ETF right now? Before making a decision, take into account the following:
The Motley Fool Stock Advisor analyst team has recently identified what they believe are the top 10 stocks for investors to consider buying at present, and the Vanguard S&P 500 ETF did not make the cut. The 10 chosen stocks are anticipated to yield significant returns in the forthcoming years.
Reflect on the case of Nvidia, which featured on this list back on April 15, 2005. If you had invested $1,000 at the time of the recommendation, you would now have $822,755!
The Stock Advisor offers investors a clear roadmap to success, providing guidance on portfolio construction, regular updates from analysts, and two fresh stock picks each month. Since 2002, the Stock Advisor service has quadrupled the return of the S&P 500.
It’s worth noting that John Mackey, the former CEO of Whole Foods Market, a subsidiary of Amazon, is a board member of The Motley Fool. Suzanne Frey, an executive at Alphabet, and Randi Zuckerberg, a former director at Facebook and sister to Meta Platforms CEO Mark Zuckerberg, are also on The Motley Fool’s board of directors. Selena Maranjian holds positions in various companies, including Adobe, Advanced Micro Devices, Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, Meta Platforms, Microsoft, Nvidia, and Salesforce.
