Prediction: This Vanguard ETF Could Outperform the S&P 500 in 2026

Group 1 - The tech sector has been the best-performing sector in the S&P 500 for 2023 and 2025, and the second best in 2024, but historical trends suggest this outperformance may not last forever [2] - The price/earnings ratio of the S&P 500 is currently at 31, indicating that stock prices are becoming expensive, which may lead investors to seek better opportunities elsewhere in the market [2] - The U.S. economy is expected to experience positive but slower growth in 2026, with the annualized GDP growth rate in Q3 2025 at 4.3%, significantly above the 30-year average of 2.5% [4] Group 2 - A growth slowdown, rather than a bear market or recession, could lead to better performance for value stocks compared to growth stocks, as current economic growth rates are above trend [5] - The Vanguard Value ETF is positioned to potentially outperform in 2026 due to the anticipated rotation from growth stocks to value stocks amid slower economic growth [7] - The current market shows a concerning lack of breadth, with the top 10 positions in the S&P 500 accounting for approximately 40% of the index, and the tech sector making up nearly 35%, both figures near all-time highs [8]