Goldman Sachs forecasts that the S&P 500 will return 6.5% annually over the next decade, with European and emerging-market stocks expected to outperform. European stocks are projected to return 7.5% annually, while emerging-market stocks are forecasted to return 12.8% annually, supported by strong earnings growth and high dividend yields.

For individual investors seeking exposure to European and emerging markets, Vanguard FTSE Europe ETF and Vanguard FTSE Emerging Markets ETF offer cheap options. The Vanguard FTSE Europe ETF tracks about 1,200 European companies, with top holdings including ASML Holding and Roche Holding. The Vanguard FTSE Emerging Markets ETF includes about 6,200 companies, with top holdings like Taiwan Semiconductor and Tencent Holdings.

While U.S. stocks outperformed European and emerging-market stocks in the last decade, Goldman analysts predict a shift. They believe European stocks could outperform due to cheaper valuations and a weakening U.S. dollar relative to the Euro. However, personal preference and investment strategy should dictate portfolio allocation between U.S. and European equities.

The Vanguard FTSE Emerging Markets ETF is favored over the European fund due to projections of faster economic growth in China and India. The fund has a low expense ratio of 0.06%, making it an attractive option for investors seeking exposure to emerging markets. However, potential advancements in U.S. companies driven by artificial intelligence could impact future returns.

It’s important to consider all factors before investing in the Vanguard FTSE Europe ETF. The Motley Fool Stock Advisor analyst team identified 10 stocks for investors to buy now, excluding the European ETF. Past recommendations like Netflix and Nvidia have shown significant returns, highlighting the potential for high growth in selected stocks. Investors should assess their risk tolerance and investment goals before making decisions.

Read more at Yahoo Finance: Buy 2 Vanguard Index Funds to Beat the S&P 500 in the Next Decade, According to Wall Street Analysts