Worried About Tariffs? Buy 2 Vanguard Index Funds That Are Beating the S&P 500 in 2026.

Market Overview - The S&P 500 has traded sideways in 2026, while several international stock markets have achieved double-digit gains, indicating a shift in investor sentiment [1][2] - Uncertainty regarding the economic impact of President Trump's tariffs has led some investors to move funds from U.S. stocks to international markets, contributing to the S&P 500's stagnant performance [2][3] Vanguard FTSE Pacific ETF - The Vanguard FTSE Pacific ETF tracks approximately 2,300 companies in Asia-Pacific, with significant exposure to industrials (20%), financials (20%), and consumer discretionary (15%) sectors [5] - Year-to-date, the Vanguard FTSE Pacific ETF has outperformed the S&P 500 by nearly 18 percentage points, primarily due to its holdings in Samsung and SK Hynix, the largest memory chip manufacturers [5][11] - Despite its strong performance this year, the ETF has underperformed the S&P 500 by about 150 percentage points over the past decade [5] - The ETF has a low expense ratio of 0.07%, making it a cost-effective option for investors seeking exposure to the Asia-Pacific region [7] Vanguard FTSE Developed Markets ETF - The Vanguard FTSE Developed Markets ETF tracks nearly 3,900 companies in developed markets outside the U.S., with a focus on financials (24%), industrials (18%), and consumer discretionary (11%) sectors [10] - Year-to-date, this ETF has outperformed the S&P 500 by nearly 11 percentage points, but like the Pacific ETF, it has underperformed by about 150 percentage points over the past decade [10][12] - The outperformance in 2026 is also attributed to its holdings in Samsung and SK Hynix, although it has not performed as well as the Pacific ETF due to lower exposure to these chipmakers [11] - The ETF has a lower expense ratio of 0.03%, which has historically contributed to its better performance in certain periods [12]