Prediction: This Unstoppable Vanguard ETF Will Beat the S&P 500 Again in 2026

Core Insights - The Vanguard FTSE Developed Markets Index Fund is highlighted for its low fees, high yield, and excellent diversification, making it a strong investment option [1] - The S&P 500 has increased by 13% in 2025 but is underperforming compared to previous years, indicating potential loss of momentum [1][2] - The Vanguard Developed Markets Index Fund has outperformed the S&P 500 with a 25% increase this year, suggesting it may continue to do so in 2026 [2] Market Conditions - U.S. companies may face challenges in upcoming quarters due to tariffs and trade policies, which could negatively impact the S&P 500 [3] - A diversified investment strategy, particularly in international markets, may provide better growth opportunities as countries seek alternative trade routes [4] Fund Characteristics - The Vanguard FTSE Developed Markets ETF has a diversified portfolio with 53% in Europe, 35% in the Pacific, and under 11% in North America, positioning it well for growth amid global trade shifts [4] - The fund includes approximately 3,900 stocks, featuring blue-chip companies like SAP, AstraZeneca, and Roche, with an average price-to-earnings multiple of just under 17, significantly lower than the S&P 500's average of 26 [5][6] Investment Outlook - The Vanguard fund's modest valuation and strong blue-chip stocks may offer greater upside potential compared to the S&P 500, which is seen as overdue for a decline [6] - Exposure to more reasonably priced international stocks can help minimize downside risk and provide a margin of safety for investors [7] - The Vanguard fund is considered a solid long-term investment option, aiding in portfolio diversification and reducing dependence on U.S. stocks [8] Financial Metrics - The fund boasts a low expense ratio of 0.03% and an attractive yield of 2.8%, enhancing its appeal for long-term investors [9]