1 Top Vanguard ETF That Can Turn $50,000 Into Over $1 Million

If you're investing a large sum of money in the stock market, it can be a bit of a challenge finding the right type of investment. Although you want to earn a good return to make the most of that money, you also want to be careful not to take on a lot of risk and incur a huge loss, either. Taking a big risk on a $100 investment may not be a big deal, but once you're talking tens of thousands of dollars, you'll definitely want to be a lot more selective in determining which investments to consider and which to avoid.

For most investors, particularly those who don't want to be following stocks and staying on top of the latest news and earnings results, an exchange-traded fund (ETF) can be a more practical option. Vanguard has many solid ETFs with low fees that can be suitable long-term investments. They can keep your risk fairly low while putting you in a great position to earn a high return.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

One fund in particular that may be among the best investments for growth investors to consider today is the Vanguard Growth Index Fund ETF (NYSEMKT: VUG). Below, I'll show you why this can be a great option if you want to turn a $50,000 investment into at least $1 million.

Vanguard Growth Index Fund targets top growth and charges minimal fees

If you're investing for the long haul, you'll want to ensure you are avoiding funds with high fees. Fees will chip away at your returns and by keeping them as low as possible, you can increase your balance much quicker.

Some fees are unavoidable since someone else is technically doing the stock-picking and rebalancing of an ETF on a regular basis. But with the Vanguard Growth ETF, its expense ratio of 0.04% is extremely modest and it won't make much of a dent in your returns.

It's a reasonable fee given the strong diversification you get with the fund, which contains more than 180 holdings. You'll get exposure to the best growth stocks in the world, including Apple, Nvidia, and Microsoft. The biggest risk with the fund is that it is heavily dependent on how tech does because that sector accounts for about 57% of the ETF's total weight. But there's also a sizable portion (20%) allocated toward consumer discretionary stocks, industrials (9%), and healthcare (6%).

VUG Total Return Level data by YCharts

How long would it take for the fund to turn a $50,000 investment into $1 million?

The S&P 500's long-run annual return is about 10%. Lately, however, it's been doing much better than that with 2024 marking the second straight year in which its gains are up more than 20%. And tech stocks and the hype around artificial intelligence are a big reason the index has been performing so well.

While that's great news for investors, it also suggests that the market could be due for a bit of a slowdown in the years ahead. Rather than trying to predict what the future returns will be, I've created the following table that will show you how a $50,000 investment would grow based on different annual growth rates.

Data source: Calculations by author.

If large-cap growth stocks perform well over the long run, then the fund could potentially turn a $50,000 investment into $1 million after 30 years. But if there's any kind of a prolonged slowdown, which there may very well be, then odds are, it may take around 35 years before the investment gets to that level.

Although that may seem like a long time and you might be tempted to consider other, more aggressive options, the benefit of a fund such as this is that it's a relatively safe investment to hold over the long term.

Targeting growth stocks is still the best bet for long-term gains

There's no crystal ball that can tell you how much of a return you'll average in the long run. But one thing that I am confident about is that investing in growth stocks is a much better way to increase your portfolio's balance than dividend stocks or other investments that may be safer, but whose returns are likely to be much less impressive. And while riskier options may have the potential to generate higher returns for you, they can also quickly destroy your investment if things go awry.

It's growth stocks that capture the excitement and attention of investors and can set you up for the best possible returns in the long run. And with the Vanguard Growth fund, you don't even need to worry about finding the best ones. This is an ETF that can be a great option to put into your portfolio regardless of how much money you're investing.

Should you invest $1,000 in Vanguard Index Funds - Vanguard Growth ETF right now?

Before you buy stock in Vanguard Index Funds - Vanguard Growth ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard Index Funds - Vanguard Growth ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $823,000!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of December 30, 2024

David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Vanguard Index Funds-Vanguard Growth ETF. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.