Vanguard ETFs: Energy and Tech lead five-year S&P 500 outperformers

A recent analysis of Vanguard’s exchange-traded funds reveals that only eight funds have outperformed the flagship S&P 500 ETF (VOO) over a five-year period. The Vanguard Energy ETF (VDE) led this group with a five-year annualized return of 25.84%, driven by tighter supply and higher commodity prices. The Vanguard Information Technology ETF (VGT) followed with an 18.50% annualized return, supported by growth in the semiconductor, cloud, and AI sectors.

Other funds outperforming VOO include the Vanguard U.S. Multifactor ETF, Vanguard International High Dividend ETF, and various mega-cap funds. While many Vanguard ETFs showed outperformance year-to-date, much of that advantage diminishes when viewed over a five-year window.

In contrast to the high-performing sector funds, the Vanguard Morningstar Mid-Cap ETF (VO) has received a sell rating due to overvaluation. Analysts suggest the fund trades at a premium with an estimated five-year annualized return of only 5.1%, which is significantly below the required 9.6% return. The fund's current valuation is noted as having a potential 19% downside compared to its estimated fair value.