2 Top Vanguard ETFs That Can Turn $350 per Month Into $1 Million in 33 Years

Putting money into the stock market on a regular basis is a good way to build up your savings and turn that into some real wealth in the long run. Below, I’ll show you how investing $350 per month into a couple of solid exchange-traded funds (ETFs) can put you on track to potentially earn $1 million after a period of 33 years (or less).

For long-term investors, focusing on Vanguard ETFs can be ideal, as their fees are incredibly low and they offer good diversification, making them relatively safe options to hang on to for years. Two of the best growth-focused Vanguard funds that can make the most of your money are the Vanguard Information Technology Index Fund ETF (VGT 0.14%) and the Vanguard Growth Index Fund ETF (VUG 0.28%).

Vanguard Information Technology Index Fund ETF

Tech is normally where the big payoff is for investors in the long run. Investing in cutting-edge technology companies, however, can be difficult. Trying to track all the latest trends and sorting out the pretenders from the solid growth stocks is not always easy. This is why investing in the Vanguard Information Technology Index Fund ETF can be well worth it.

This fund has a low expense ratio of just 0.09%, and in return for that, you’ll get a broad mix of tech stocks. As of Sept. 30, there were 314 holdings in the ETF, covering companies in application software, systems software, semiconductors, hardware, storage, and many other areas of tech.

Over the past 10 years, the fund has generated total returns, which include dividends, of 681%, dwarfing the SPDR S&P 500 ETF‘s gains of 284% over that time frame (returns are as of Nov. 3). For the VGT ETF, that averages out to a compound annual growth rate (CAGR) of just under 23%. Given the inflated valuations in the market today, particularly in tech, that’s not a rate of return that’s likely to persist in the years ahead.

However, even if the fund ends up averaging a long-term return that’s more in line with the S&P 500‘s long-run average of 10%, then this can still be a millionaire-making investment. Assuming a 10% return, a $350-per-month investment in this fund would grow to around $1.1 million after a period of 33 years. And if its returns end up being better than that, you’ll get to that milestone even quicker.

Vanguard Growth Index Fund ETF

A fund that can generate similar returns in the long run is the Vanguard Growth Index Fund ETF. This fund has a slightly lower management fee of 0.04% and it’s focused on growth stocks as a whole, rather than just tech.

There are 160 holdings in its portfolio, and while the vast majority (62%) are tech stocks, you will get much more diversification with this ETF. In addition to the tech giants, you’ll also have exposure to Eli Lilly, Mastercard, McDonald’s, and top growth stocks from other industries. From a risk standpoint, this can make for a more attractive option to consider, particularly if you’re worried about tech stocks and a possible bubble due to artificial intelligence (AI).

Over the past decade, the ETF’s total returns have come in at 395%, which averages out to a CAGR of more than 17%. A return like that would be fantastic, but it too is likely to cool off over a longer time frame.

Both funds can make for great long-term investments

There’s no way to know for sure what return either of these funds will end up averaging when looking at a period of 30-plus years. But with a focus on growth, I don’t think it’s unreasonable to expect that they can generate annual returns that are at least on par with how well the S&P 500 has historically done, as top growth stocks typically outperform the broader market — in the long run.

Either one of these ETFs can be a solid option to invest in each month. Which one is right for you will likely depend on your appetite for tech stocks and overall risk tolerance.