
The S&P 500 has been a solid benchmark that has produced annualized double-digit returns for many years. However, it’s possible for investors to outperform the S&P 500. Investors who want to outperform the index with individual stocks can start by looking within the index. Any index has individual stocks that have outperformed it since indices like the S&P 500 also contain underperforming stocks.
However, you don’t have to pick individual stocks to beat the S&P 500. There are some Vanguard ETFs that look ready to outperform the S&P 500 in 2025. These ETFs have outperformed over the long run, and that trend should continue.
Key Points
-
VUG and VGT are two Vanguard ETFs that look like they will outperform the S&P 500 this year.
-
Both of these funds have long histories of beating the S&P 500, and they have low expense ratios too.
-
4 million Americans are set to retire this year. If you want to join them, click here now to see if you’re behind, or ahead. It only takes a minute. (Sponsor)
Vanguard Growth Index Fund ETF (VUG)

The Vanguard Growth Index Fund ETF (NYSEARCA:VUG) is the first fund that is likely to outperform the S&P 500. They’re pretty much even to start the year, but a rally from big tech should help VUG take the lead.
VUG has delivered an annualized 17.2% return over the past five years and has an annualized 10-year return of 15.8%. Its portfolio mainly consists of the Magnificent Seven stocks, and its top 10 holdings make up 61% of its total assets. VUG has 51.6% of its assets in the tech sector.
The fund is also very affordable. It only has a 0.04% expense ratio that goes along nicely with the fund’s 0.42% SEC yield. The yield alone covers the expense ratio, and you can also get steady long-term returns if VUG sticks with its historical trends.
Vanguard Information Technology ETF (VGT)

The Vanguard Information Technology ETF (NYSEARCA:VGT) is another Vanguard ETF that is likely to outperform the S&P 500 this year. Just like VUG, this ETF also has a strong focus on the Magnificent Seven stocks. The fund’s top 10 holdings make up 60% of its total assets. VGT has 25 holdings that are all in the tech sector.
It’s been a good formula for VGT’s success. The ETF’s shares have an annualized 19.5% return over the past five years and an annualized 10-year return of 20.8%. The fund has a 0.09% expense ratio and a 0.47% SEC yield.
VGT is roughly flat to start the year, but that’s largely due to the market’s reaction to DeepSeek. While the S&P 500 has a year-to-date lead, VGT has had a higher return over the past year and over the past five years.
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.