2 Vanguard ETFs to Buy Now and Hold Through 2030
Tech stocks have pulled back in October. The Vanguard Information Technology ETF(NYSEMKT:VGT) set a record close on Oct. 6 and, as of this writing, trades around 10% below it. The Vanguard S&P 500 ETF(NYSEMKT:VOO) hit its own record close that day and is about 3% under that level.
Even after the pullback, the tech fund is up around 25% this year as of this writing, more than twice the S&P 500 fund's rise of about 11%.
Missed AI's "Act 1"? Act 2 Could Be 16x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we're only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
For investors planning to hold through 2030, I think both funds can work well together. The S&P 500 fund can be the core, with the tech fund as a tilt toward the market's largest technology companies . But the two overlap far more than their names suggest, and that should guide how much of the tech fund an investor holds.
Image source: Getty Images.
1. Vanguard S&P 500 ETF: the core
The S&P 500 fund just owns the businesses in the S&P 500(SNPINDEX:^GSPC) index. It holds 505 stocks and charges 0.03% a year (around $3 annually per $10,000 invested), and its holdings traded at about 25 times earnings as of Sept. 30.
For a holding period through 2030, a fee this small hardly registers. And the fund gives investors a stake in banks, healthcare businesses, retailers, and energy producers along with the tech giants.
But the S&P 500 fund leans on tech more than many investors may expect. Information technology stocks made up around 40% of the fund's assets at the end of September.
And three companies alone -- Nvidia(NASDAQ:NVDA), Apple(NASDAQ:AAPL), and Microsoft(NASDAQ:MSFT) -- accounted for about 22% of its assets.
Put simply, an investor who owns just the index fund is already making a big bet on tech.
2. Vanguard Information Technology ETF: more of the same giants
The tech fund holds 318 stocks and charges 0.09% a year (around $9 annually per $10,000), and its holdings traded at about 33 times earnings as of Sept. 30. Its fee is three times the S&P 500 fund's, and its valuation is noticeably higher. After an 8-for-1 share split in April, one share costs around $118 as of this writing.
As of Sept. 30, Nvidia, Apple, and Microsoft made up almost 45% of the tech fund. That's around double their combined weight in the S&P 500 fund.
Sure, this concentration has paid off. In the 10 years ending Sept. 30, the tech fund returned around 25% a year on average, compared to about 15% for the S&P 500 fund. But this period included 2022, when the tech fund lost about 30% while the S&P 500 fund lost about 18%.
How big should the tech slice be?
Because both funds share so many stocks, adding the tech fund mainly means owning more of the same companies. Of the tech fund's 318 holdings, 74 are also in the S&P 500 fund. These 74 stocks made up around 89% of the tech fund's assets at the end of September.
The tilt, then, is a deliberate bet on the same few giants the core already holds. A portfolio split 80% to the S&P 500 fund and 20% to the tech fund would have around 26% of its money in Nvidia, Apple, and Microsoft. That compares to about 22% in the S&P 500 fund alone. Tech stocks overall would grow from around 40% of the portfolio to a bit over half. And the blended fee would be about 0.04%, or around $4 a year on $10,000.
The same 80/20 split, set at the start of 2022, would've lost about 20% that year, versus about 18% for the S&P 500 fund alone. A bigger tech slice could've widened the gap a lot.
In the end, I think the S&P 500 fund is a strong core holding to buy now and hold through 2030. And the tech fund is arguably a sensible way for investors who want more exposure to the market's tech leaders to get it, if the slice stays small.
Yes, the tech fund's holdings trade at a premium, and a tough patch for Nvidia, Apple, or Microsoft might hurt both funds at once. But after the tech fund's pullback from its October peak, I'd think about pairing a 10% to 20% position in it with the S&P 500 fund, maybe building the position gradually.
Should you buy stock in Vanguard Information Technology ETF right now?
Before you buy stock in Vanguard Information Technology ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard Information Technology ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflixmade this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $334,793!* Or when Nvidiamade this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,257,420!*
Now, it's worth noting Stock Advisor's total average return is 874% — a market-crushing outperformance compared to 209% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor , and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of November 2, 2026.
Daniel Sparks and his clients have positions in Apple. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy .
2 Vanguard ETFs to Buy Now and Hold Through 2030 was originally published by The Motley Fool
