It’s hard not to be impressed by the Vanguard Information Technology ETF, which has averaged annual gains of about 24% over the past decade. If it can match that pace over the next 20 years, $1,000 invested in this exchange-traded fund (ETF) today will be worth nearly $74,000 in 2046!
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But that’s a big if. And if the stock market swoons sometime this year, it could take lots of growth stocks and growth-focused ETFs down with it, sharply. So permit me instead to suggest an ETF that I own myself, and that helps me sleep better at night: the Schwab US Dividend Equity ETF(NYSEMKT: SCHD).
I love it because it offers both price appreciation and dividend income. The S&P 500 recently had a dividend yield of merely 1%. But the Schwab ETF’s yield was 3.3%, more than three times bigger. It’s been a very respectable performer, too:
|
Period |
Average annual gain |
|---|---|
|
Past 3 years |
14.22% |
|
Past 5 years |
9.57% |
|
Past 10 years |
12.64% |
Source: Morningstar.com, as of July 27, 2026.
How could the Schwab US Dividend Equity ETF grow your money?
Let’s say you make a single $1,000 investment in the Schwab ETF. And let’s presume that it averages annual gains of 10% over the coming 20 years. (For context, the stock market has averaged annual returns of close to 10% over many decades.) If so, you’ll end up with a stake worth about $6,700.
That’s way less than $74,000, I know. But it should be a less volatile ride — and during market downturns, you’ll still collect dividend income.
You can improve on that $6,700 a lot, too. Simply make more than a one-time $1,000 investment. Put in $1,000 per month, or $12,000 annually, and you may end 20 years with … $687,000!
That’s not guaranteed, of course. The ETF could average more or less than 10% annually. Still, this fund is well worth considering for your hard-earned dollars. You can profit well — without picking any stocks. Leave that work to the Schwab US Dividend Equity ETF.
Should you buy stock in Vanguard Information Technology ETF right now?
Before you buy stock in Vanguard Information Technology 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 Information Technology ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $390,394!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,209,184!*
Now, it’s worth noting Stock Advisor’s total average return is 899% — a market-crushing outperformance compared to 206% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of July 30, 2026.
Selena Maranjian has positions in Schwab U.S. Dividend Equity ETF. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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