Had you invested in a fund monitoring the S&P 500 at first of 2025, you’ll be sitting on a 5% acquire proper now. Nevertheless, had you invested within the Vanguard S&P 500 Progress ETF (VOOG 0.72%) as an alternative, you’ll have earned a fair higher return of 8% over the identical interval.
The Vanguard S&P 500 Progress ETF is an exchange-traded fund (ETF) that tracks the efficiency of the S&P 500 Progress index. This index holds 211 of the best-performing progress shares from the common S&P 500 and disregards the remaining, so it assigns a lot increased weightings to powerhouses like Nvidia and Microsoft.
The Vanguard S&P 500 Progress ETF has crushed the S&P 500 yearly, on common, because it was established in 2010. Here is why traders with a spare $400 would possibly wish to put it towards shopping for one share within the ETF in July, with the aim of holding it for the long run.
Picture supply: Getty Photos.
The world’s finest progress shares packed into one ETF
The S&P 500 Progress index selects its constituents from the common S&P 500 primarily based on components like their gross sales progress and the momentum of their inventory costs. Subsequently, it is no shock that the highest 5 holdings within the Vanguard S&P 500 Progress ETF are Nvidia, Microsoft, Apple, Meta Platforms, and Broadcom (in that order). These 5 positions alone make up 34.1% of the full worth of its portfolio.
These firms are among the many leaders in high-growth segments of the tech business, like synthetic intelligence (AI). Because the begin of 2023 alone, Nvidia inventory has soared tenfold, pushed by surging gross sales of its information middle chips, that are designed particularly for AI growth.
Though the efficiency of this ETF is closely influenced by a handful of expertise shares, it does supply diversification. For instance, the next 10 shares alone characterize 14.4% of the worth of its portfolio, and none of them are within the tech or tech-adjacent industries:
Inventory
Vanguard ETF Portfolio Weighting
Visa
2.38%
Eli Lilly
2.20%
Mastercard
1.80%
Costco Wholesale
1.74%
Berkshire Hathaway Class B
1.71%
JP Morgan Chase
1.59%
Walmart
1.08%
Progressive Corp
0.63%
Caterpillar
0.63%
American Specific
0.62%
Knowledge supply: Vanguard. Portfolio weightings are correct as of Could 31, 2025, and are topic to alter.
Visa and Mastercard function two of the world’s largest fee networks, facilitating transactions between customers, retailers, and banks. American Specific is one other main participant on this area, besides it additionally points its personal playing cards to customers and companies and funds the strains of credit score connected to them.
Berkshire Hathaway, however, is a conglomerate run by legendary investor Warren Buffett. It owns a lot of personal subsidiaries like GEICO Insurance coverage and Duracell, and it additionally has a $286 billion portfolio of publicly traded shares and securities.
Costco and Walmart are two of America’s largest retailers. Costco makes use of a membership-based mannequin and sells merchandise in bulk at heavy reductions, whereas Walmart operates extra conventional shops promoting every thing from groceries to clothes. Walmart has additionally constructed a robust on-line presence to compete with e-commerce giants like Amazon.
Probably the most engaging options of the Vanguard S&P 500 Progress ETF is its ultra-low value. It has an expense ratio of simply 0.07%, so an funding of $10,000 would incur an annual price of simply $7. Vanguard says comparable funds throughout the business are greater than 10 occasions as costly, with a mean expense ratio of 0.93%.
The Vanguard ETF has a improbable observe file towards the S&P 500
The Vanguard S&P 500 Progress ETF has delivered a compound annual return of 16% because it was established in 2010, handily beating the S&P 500, which rose by a mean of 13.4% over the identical interval.
The two.6 percentage-point distinction annually may not sound like a lot, however over time it could’ve made an enormous distinction in greenback phrases for traders due to the magic of compounding:
Fund
Beginning Stability (2010)
Compound Annual Return
Stability In 2025
Vanguard S&P 500 Progress ETF
$50,000
16%
$463,276
Vanguard S&P 500 ETF
$50,000
13.4%
$329,735
Calculations by creator.
As I highlighted on the prime, the Vanguard ETF is on observe to outperform the S&P 500 but once more in 2025. A lot of tailwinds may gain advantage progress shares within the second half of the yr, together with President Trump’s tax cuts, a possible decline in rates of interest, and a continued improve in spending on AI information middle infrastructure and software program. Because of this, this may very well be an ideal ETF for traders to purchase with $400 in July.
American Specific is an promoting accomplice of Motley Idiot Cash. Randi Zuckerberg, a former director of market growth and spokeswoman for Fb and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Idiot’s board of administrators. John Mackey, former CEO of Complete Meals Market, an Amazon subsidiary, is a member of The Motley Idiot’s board of administrators. JPMorgan Chase is an promoting accomplice of Motley Idiot Cash. Anthony Di Pizio has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Amazon, Apple, Berkshire Hathaway, Costco Wholesale, JPMorgan Chase, Mastercard, Meta Platforms, Microsoft, Nvidia, Progressive, Visa, and Walmart. The Motley Idiot recommends Broadcom and recommends the next choices: lengthy January 2026 $395 calls on Microsoft and brief January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure coverage.
