Wall Street predicts the information technology and consumer discretionary sectors will outperform the S&P 500. The Vanguard Information Technology ETF includes top holdings like Nvidia, Apple, and Microsoft. The Vanguard Consumer Discretionary ETF includes heavy exposure to Amazon, Tesla, and Home Depot. Analysts forecast a 18% advance for the S&P 500 to 8,200 in the next year.

Investors can access the technology and consumer discretionary sectors through the Vanguard Information Technology ETF and the Vanguard Consumer Discretionary ETF. The Vanguard Information Technology ETF has a 33% upside implied by the median target price. The fund has a cheap expense ratio of 0.09% and is likely to benefit from increased artificial intelligence spending.

The Vanguard Consumer Discretionary ETF has a 22% upside implied by the median target price. The fund tracks 288 stocks in the consumer discretionary sector, with top holdings like Amazon, Tesla, and Home Depot. Despite potential underperformance during market drawdowns, the fund has performed well in the last decade.

Investors should be cautious of concentration risk with these index funds. The Vanguard Information Technology ETF and Vanguard Consumer Discretionary ETF have a heavy concentration in a few key stocks. Diversification into other sectors like financials, industrials, or consumer staples may mitigate risk.

Before investing in the Vanguard Information Technology ETF, consider expert recommendations from the Motley Fool Stock Advisor team. The team has identified 10 top stocks for investors to buy now, potentially offering significant returns. Past recommendations have yielded impressive returns compared to the S&P 500.

Read more at Nasdaq: Buy 2 Vanguard Index Funds to Beat the S&P 500 in the Next Year, According to Wall Street