1 Unstoppable Vanguard ETF That Could Crush the S&P 500 (Again) in 2026

The benchmark S&P 500 index returned 16.4% during 2025, acold outpacing its mean yearly summation of 10.6% dating backmost to its inception successful 1957. However, had investors bought the Vanguard Information Technology ETF (NYSEMKT: VGT) astatine the commencement of past twelvemonth instead, they would person earned a overmuch higher instrumentality of 21.2%.

This Vanguard exchange-traded money (ETF) exclusively invests successful companies from the accusation exertion sector, which includes galore of the artificial quality (AI) powerhouses that person propelled the broader marketplace higher implicit the past fewer years.

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The Vanguard ETF has beaten the S&P 500 each twelvemonth since it was established successful 2004, truthful its outperformance past twelvemonth surely wasn't a one-off. Here's wherefore I deliberation it volition crush the marketplace again successful 2026.

The Vanguard Information Technology ETF holds 320 stocks from 12 antithetic subsegments of the exertion industry. The semiconductor subsegment is the largest by far, representing 32.4% of the worth of the ETF's full portfolio. That shouldn't travel arsenic a astonishment considering apical AI chipmakers similar Nvidia, Broadcom, Micron Technology, and Advanced Micro Devices person a combined worth of $7 trillion.

Systems bundle is the 2nd largest subsegment successful the Vanguard ETF, with a 17.7% portfolio weighting. It features companies similar Microsoft and Palantir Technologies, which merchantability AI bundle chiefly to endeavor customers. It besides includes Oracle, which is simply a hybrid bundle and AI infrastructure company, successful summation to AI cybersecurity powerhouses similar Palo Alto Networks and CrowdStrike.

As you tin tell, the Vanguard ETF offers vulnerability to the full AI space, from hardware suppliers to bundle developers. But it doesn't halt there, due to the fact that it besides invests successful consulting companies, exertion developers, net work providers, and suppliers of instrumentality and components different than chips specifically, each of which are besides playing a cardinal relation successful the AI revolution.

I mentioned 9 stocks supra by name. Since the AI roar started gathering momentum astatine the opening of 2023, each 1 of them has astatine slightest doubled, with an mean instrumentality of 655% (and a median instrumentality of 353%). The S&P 500 climbed by 81% implicit the aforesaid period, truthful having specified a precocious vulnerability to those stocks is simply a cardinal crushed for the Vanguard ETF's accordant outperformance.