The S&P 500 Growth index focuses on the best-performing growth stocks from the S&P 500, leading to market-beating returns with higher volatility. The Vanguard S&P 500 Growth ETF tracks this index and is predicted to outperform the S&P 500 in 2026.

The S&P 500 comprises 500 companies from various sectors, with information technology dominating due to companies like Nvidia, Microsoft, and Apple. The Vanguard ETF has outperformed the S&P 500 consistently, holding 216 top growth stocks.

The Growth index selects stocks based on momentum and sales growth, rebalancing quarterly. It has a heavier focus on tech giants like Nvidia and Alphabet, driving its outperformance compared to the S&P 500.

The Vanguard ETF has historically beaten the S&P 500, with a compound annual return of 16.8% since 2010. It thrives on AI, cloud computing, and other technologies, poised for another strong year in 2026.

While the Vanguard ETF can be volatile, it offers exposure to high-performing stocks and avoids underperformers, contributing to its success. Investors comfortable with volatility may benefit from its track record in outperforming the S&P 500.

Considerations should be made before investing in the Vanguard ETF, as other stocks may offer significant returns. The Motley Fool Stock Advisor team identifies top stocks with potential for monster returns, highlighting opportunities beyond the Vanguard ETF.

Read more at Nasdaq: Prediction: This Spectacular Vanguard ETF Will Crush the S&P 500 Again in 2026