Vanguard ETFs Show Strong 2024 Performance, AI Boost Expected

Investors take note: Vanguard's index funds have outperformed, with the S&P 500 Growth ETF gaining 35% and Russell 1000 Growth ETF 32% in 2024. Growing AI spending hints at further potential gains in 2025 and beyond.

Date: 06-01-2025

AI Rating: 7

Performance Overview: The Vanguard S&P 500 Growth ETF and the Vanguard Russell 1000 Growth ETF reported significant returns of 35% and 32%, respectively, in 2024. These performances surpassed the broader S&P 500's 23% gain. Such strong returns can positively influence investor sentiment towards these ETFs.

Technology Sector Exposure: Both ETFs have heavy exposure to the technology sector, which significantly contributed to their recent performance. The S&P 500 Growth ETF allocates 49% to technology, while the Russell 1000 Growth ETF has an even higher allocation at 59%. With projected growth in artificial intelligence (AI) expenditures at 36% annually through 2030, the technology sector's momentum suggests continued potential for stock price appreciation.

Expense Ratios: Vanguard ETFs boast low expense ratios, 0.1% for the S&P 500 Growth ETF and 0.08% for the Russell 1000 Growth ETF. Lower fees can further enhance investor returns over time, making these funds attractive options for investors looking to minimize costs.

Long-Term Track Records: Over the last decade, the Vanguard S&P 500 Growth ETF returned 310%, averaging 15.1% annually, while the Russell 1000 Growth ETF returned 367%, averaging 16.6%. The historical performance indicates a strong track record that can attract new investors and retain current ones.

Future Outlook: Analysts predict that as enterprise spending on AI increases, both funds may continue to outperform the broader market. If such trends persist, upward adjustments in stock prices of the underlying companies are likely, further benefiting the ETFs.

Stocks: VOOG VONG AAPL NVDA MSFT AMZN GOOGL