Here, I’m going to highlight three Vanguard ETFs that could be worth considering for 2026 (and beyond). I see these funds as a great way to build wealth with minimal effort.

An ideal core holding

For a core portfolio holding, it’s hard to beat Vanguard’s FTSE All-World UCITS ETF (LSE: VWRP), in my view. This is a broad global tracker fund that provides exposure to over 3,600 stocks across developed and emerging markets.

All the big stock market names (Apple, Nvidia, Tesla) are in it. And ongoing fees are only 0.19% per year.

In terms of risk, Vanguard puts it at six out of seven so it’s higher up on the risk spectrum (because it’s only invested in stocks). One thing that’s worth highlighting is the fact that US stocks make up about 65% of the fund (and the Magnificent 7 make up about 35% of the US market) so there’s certainly some geographic and tech sector risk here.

Overall though, I see this as a great product for straightforward exposure to the global markets.

A portfolio diversifier

If an investor is looking to diversify away from the US market, Vanguard’s FTSE Emerging Markets UCITS ETF (LSE: VFEG) could be worth a look. This offers exposure to emerging market countries such as China, Taiwan, India, and Brazil.

One thing that appeals to me about this product is that there are some really exciting Chinese companies in the portfolio. Baidu is a good example – it has AI models, AI chips, self-driving taxis and more.

Other names in the ETF include Taiwan Semiconductor, Alibaba, and BYD. So, there are some world-class companies in the mix.

Vanguard puts the risk level here at six again. For me, the big risk is geopolitical tension (eg between the US and China or China and Taiwan).

I see a lot of long-term potential, however. Fees are 0.17% per year.

It’s hard to ignore the US market

If bullish on the US market (“Never bet against America” is Warren Buffett’s advice), Vanguard’s S&P 500 UCITS ETF (LSE: VUAG) could be a good fund to consider. This aims to track the legendary S&P 500 index.

Top holdings are currently Nvidia, Apple, and Microsoft. Fees are just 0.07% per year.

Can the US market continue to perform after several years of strong gains? Plenty of experts believe so.

Analysts at Oppenheimer recently stuck a 8,100 target on the index for 2026. That’s almost 20% above the current level.

This fund is also rated six out of seven for risk. For me however, it’s riskier than the global fund as it’s only focused on the US market.

I think the risk may be worth taking on though. Over the long run, the S&P 500 has been a proven performer.

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That’s disappointing, especially when you consider that Fundsmith’s fees are much higher than those of the two ETFs. And it has got me wondering – is it time to dump the fund and move my money into index funds?

Lousy performance

The poor relative performance here is not a new phenomenon. Sadly, this fund has been underperforming for a while now.

Last year, it returned 8.9% versus 20.8% for the MSCI World index. The year before that, it did 12.4% versus 16.8% for the MSCI.

The year before that (2022), it returned -13.8% while the MSCI posted a return of -7.8%. So, it even underperformed in a bad market.

Multiple issues

What’s gone wrong? Well, for me, the main issue has been a lack of exposure to large-cap technology businesses, which have gone from strength to strength in recent years as the world has become more digital.

To my mind, there hasn’t been enough of an acknowledgement that the world is undergoing a major tech revolution. Ultimately, I think Terry Smith and his team could have taken more of a ‘top-down’, thematic view and then focused on high-quality businesses.

Stock selection has also been an issue. This has been poor, which is a problem when a fund only owns 25 to 30 stocks like Fundsmith does.

Some examples of stocks in the fund that have underperformed in recent years include LVMH, Novo Nordisk, and Unilever.

Do I switch into a tracker?

So, do I offload Fundsmith and move into something like the Vanguard S&P 500 ETF? I’m not sure, to be honest.

This ETF would give me more exposure to large-cap tech. The largest weightings here are currently Nvidia, Microsoft, Apple, Alphabet, Amazon, and Meta.

It would also eliminate the stock selection issue. I’d get exposure to 500 stocks including some really exciting ones such as Oracle, Broadcom, and Palantir.

I’m just concerned that the S&P has raced higher recently. Since April, it has risen more than 30% – a huge move in a short period of time.

After that kind of rise, I wouldn’t be surprised to see a pullback. And in this scenario, Fundsmith may end up outperforming the S&P 500 due to its focus on quality and exposure to the Healthcare and Consumer Staples sectors (around 50% of the portfolio).

My move now

Given my concerns over the S&P 500’s move higher, I’m going to hold on to Fundsmith for now. I see it as a hedge against mainstream market risks.

That said, it’s definitely ‘under review’ for me. For the fees, it needs to start delivering again.

The post Should I offload Fundsmith Equity and buy a global or S&P 500 index fund instead? appeared first on The Motley Fool UK.

That need not trouble an everyday investor though, because there’s a simple way to invest in the S&P 500. That’s through a low-cost index tracker like the Vanguard S&P 500 UCITS ETF (LSE: VUAG), which I think is worth considering.

But how much could a 30-year-old investing £150 weekly in the US index make by the time they retire? Let’s find out.

A tech-driven index

The S&P 500 is made up of the 500 leading public companies in the US. While these firms span various industries, a quick look at the top 10 names today shows that this is very much a tech-dominated index.

This makes sense, of course. We’re living through a powerful technological revolution made possible by many of these companies. In some ways, their platforms have become indispensable tech utilities, without which large parts of the global economy would cease to function.

Over the 10 years to November 2024, the S&P 500 has delivered an average annual total return of 12.7%.

If this run were to continue, a 30-year-old investing £650 a month — the equivalent of £150 a week — and reinvesting their returns in an index tracker fund from today could have a portfolio worth £6,104,465 in 38 years’ time.

This would be a cracking result from pretty modest sums invested regularly. It proves that calling compounding interest a miracle isn’t farfetched!

As mentioned, this figure assumes all dividends are reinvested, and doesn’t count broker-related fees and foreign exchange movements. Inflation over this time would also erode future spending power.

Nevertheless, £6ms would still provide a very comfortable retirement for most people. For example, I’d imagine one could still easily travel the world in luxury with such a sum, even in 2063.

Some things to consider

As we know, past performance isn’t necessarily a reliable guide to future returns. In previous decades, the annual return was more like 11%. In this scenario, the balance after 38 years would ‘only’ be £3,888,652.

Plus, there are risks. One is that the S&P 500 is now more concentrated than ever before. The top 10 stocks account for around a third of the total market capitalisation. And less than 30 make up half!

Moreover, due to surging stocks related to the artificial intelligence (AI) mega-trend, the index is now very pricey, historically speaking. The price-to-earnings (P/E) ratio is around 28.

As Apollo Global Management‘s chief economist Torsten Sløk recently noted: “Buying the S&P 500 gives the impression that you are buying 500 different stocks and diversifying your investments. But the reality is that the high and growing concentration in the S&P 500 continues to be a major problem. In short, investors should ensure that their portfolio is not all levered to Nvidia earnings.”

The future

For a 30-year-old investing regularly for retirement, I don’t think Nvidia’s earnings matter too much. In 1987, some 38 years ago, the firm didn’t even exist, along with Tesla, Alphabet’s Google, Meta, and Amazon.

Over the next decades, stocks and industries will come and go. But I expect America and the S&P 500 to keep powering higher.

The post If a 30-year-old put £150 a week in S&P 500 shares, here’s what they could have by retirement appeared first on The Motley Fool UK.

Here, I’m going to highlight three Vanguard ETFs that could be worth considering for 2025 (and beyond). I see these products as a great way to build wealth.

A simple global tracker fund

For those looking for a basic global tracker fund, I reckon the Vanguard FTSE All-World UCITS ETF’s (LSE: VWRP) a fantastic option to consider. This provides exposure to over 3,500 stocks across developed and emerging markets. And ongoing fees are only 0.22% a year.

With this product, investors get exposure to all the big names in the stock market. Want to invest in Apple, Amazon, or Nvidia? With this ETF, you can!

In terms of the risk level, Vanguard puts it at six out of seven, so it’s a higher risk product. One specific risk worth pointing out is that the fund has 65% exposure to the US stock market. So if this market tanks, this ETF’s likely to underperform.

Overall though, I think this is an excellent product for broad exposure to the global markets.

Where the action is today

Now, having too much exposure to one geographic region’s a risk, as mentioned above. But if there’s one area of the world I’d be willing to load up on today, it’s America. It’s home to so many fast-growing, innovative businesses. And history shows its stock market tends to outperform those of other countries over the long term.

“Never bet against America”
Warren Buffett

With that in mind, my next pick to consider is the Vanguard S&P 500 UCITS ETF (LSE: VUAG). It provides exposure to the S&P 500 index (the index of 500 US companies). Again, this allows exposure to all the big names in the market. Top holdings are currently Apple, Nvidia, and Microsoft.

Vanguard gives this fund a risk rating of six as well. Personally though, I see it as riskier than the global product I highlighted because it’s only focused on one market.

Fees are just 0.07%, which is very low.

An ETF for dividend investors

Finally, those interested in dividend income may want to check out the Vanguard FTSE All-World High Dividend Yield UCITS ETF (LSE: VHYL). This provides global exposure to large- and mid-cap companies that have above-average dividend yields.

This ETF offers something unique. For starters, the stocks in the portfolio are very different to a standard global tracker. Currently, top holdings include JP Morgan, Exxon, and Home Depot.

Secondly, there’s the income. Currently, the yield’s about 3%, which is far higher than the yield on a standard global tracker.

Now, Vanguard again puts the risk level here at six. But that strikes me as a little odd. Personally, I see this ETF as less risky than the other two funds I’ve mentioned, given the exposure to dividend-paying companies (which are often less risky than growth companies).

That said, if the bull market continues in 2025, this ETF may underperform the other two products. In this scenario, the lack of exposure to tech stocks could hurt performance.

Fees are 0.29% per year, so it’s more expensive than some other ETFs. But I don’t see the fees as a deal-breaker.

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