Buy These 3 Vanguard Index Funds and You Could Beat the S&P 500 Over the Next 5 Years
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By Anders Bylund – Apr 25, 2026 at 10:07AM ESTKey PointsVanguard Information Technology ETF (VGT) lets you lean into the AI boom without picking individual tech stocks, and Vanguard Small-Cap Growth ETF (VBK) gives you broad exposure to small-cap growth stocks.Vanguard International High Dividend Yield ETF (VYMI) offers geographic diversification and a 3.5% yield.None of these funds beat the S&P 500 every year, but they've shown the ability to outperform over five-year stretches.Look, the S&P 500 (^GSPC +0.80%) is great. Buying the Vanguard S&P 500 ETF and forgetting about it for 30 years is a perfectly respectable way to build wealth. Nobody's going to judge you at the retirement party, especially if you can afford serving lobster thermidor and Wagyu beef. But "hard to beat" isn't the same as "unbeatable." Some Vanguard index funds tend to outperform the S&P 500 over rolling five-year periods. The market-beating margins can be substantial, whether the stock market soars or hits speed bumps. Here are three of my favorites in that elite group. The charts below highlight each fund's total returns relative to the S&P 500 (and VOO) across various five-year periods, with sharp ups and downs. Image source: Getty Images. Double down on the AI boom VGT Total Return Level data by YCharts Vanguard Information Technology ETF (VGT +2.55%) is for investors who look at the S&P 500 and think, "not enough tech." It's a concentrated bet, but tech has been the market's chief growth engine for a while now. This exchange-traded fund (ETF) lets you lean into the ongoing artificial intelligence (AI) boom without picking individual winners. Small-caps deserve some love, too VBK Total Return Level data by YCharts Vanguard Small-Cap Growth ETF (VBK +0.49%) targets smaller U.S. companies with growth characteristics. Small caps carry more volatility, but they've historically delivered strong returns over long time horizons. They have underperformed the S&P 500 in recent years because they don't carry the tech titans found in the information technology ETF above. International income for the patient investor VYMI Total Return Level data by YCharts Finally, the Vanguard International High Dividend Yield ETF (VYMI +0.34%) takes a completely different approach. It provides both geographic diversification and serious income. Instead of chasing volatile growth stocks in North America, it hands you a 3.5% yield from international stocks. Turn on dividend reinvestment and diversify abroad.Read NextApr 21, 2026 •By Sean Williams5 of Wall Street's Most Anticipated ETF Splits of 2026 Have Officially ArrivedApr 20, 2026 •By Matt Frankel, CFPBest Tech ETFs for 2026 and How to InvestApr 20, 2026 •By Scott LevineCan You Invest in Cerebras Pre-IPO? Details & Alternatives to ConsiderApr 20, 2026 •By Matt Frankel, CFPBest Cybersecurity ETFs to Buy in 2026 and How to InvestApr 13, 2026 •By David DierkingIf I Were 25 With $300 a Month to Invest, I'd Skip Picking Stocks and Buy These 2 ETFsApr 13, 2026 •By Daniel Foelber5 Low-Cost Vanguard ETFs Are Undergoing Stock Splits.
But Which Is the Best Buy Before the Split Takes Effect on April 21?About the AuthorAnders Bylund is a contributing Motley Fool media and technology analyst covering semiconductors, cloud computing, internet infrastructure, quantum computing, and streaming media. Previously, Anders was a systems administrator for Nielsen Technology and CSX, gaining hands-on experience with enterprise-class systems. He was also a freelance writer for Ars Technica, TIME, USA Today, CNN, WIRED, and AOL's Daily Finance. He holds a bachelor’s degree in English and a master’s degree in library and information sciences from Florida State University. He believes in coyotes and time as an abstract.TMFZahrimX@TMFZahrimStocks MentionedVanguard Information Technology ETFNYSEMKT: VGT$104.16(+2.55%)+$2.59S&P 500 IndexSNPINDEX: ^GSPC$7,165.08(+0.80%)+$56.68Vanguard Index Funds - Vanguard Small-Cap Growth ETFNYSEMKT: VBK$335.15(+0.49%)+$1.64Vanguard International High Dividend Yield ETFNASDAQ: VYMI$97.98(+0.43%)+$0.42*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.