1 Brilliant Vanguard Index Fund to Buy Before It Soars Nearly 160%, According to a Wall Street Analyst
4 days agoLast Updated: May 27, 2025
0 0 4 minutes read
Tom Lee of Fundstrat Global Advisors thinks the S&P 500 can reach 15,000 by 2030, a forecast that implies nearly 160% upside from its current level of 5,800.
Lee sees two catalysts driving the S&P 500 higher: Millennials have reached peak-earnings years and demand for AI should drive outperformance in technology stocks.
The Vanguard S&P 500 ETF provides exposure to hundreds of stocks critical to the global economy, and the index fund returned 226% in the past decade.
The S&P 500(SNPINDEX: ^GSPC) is considered the single best gauge for the overall U.S. stock market. The index is down about 1% year to date, and Wall Street analysts expect little change in the remaining months of 2025.
However, Tom Lee at Fundstrat Global Advisors predicts the S&P 500 will reach 15,000 by 2030. That implies 158% upside from its current level of 5,800. Investors can position their portfolios to capture those potential gains by owning shares of the Vanguard S&P 500 ETF(NYSEMKT: VOO).
Read on to learn more.
Image source: Getty Images.
The Vanguard S&P 500 ETF tracks the performance of 500 large U.S. companies. It includes stocks from every market sector, but is most heavily weighted toward technology. The index fund covers about 80% of domestic equities and 50% of global equities by market value, providing exposure to many of the most influential stocks in the world.
These are the top 10 positions in the Vanguard S&P 500 ETF listed by weight:
Apple: 6.7%
Microsoft: 6.2%
Nvidia: 5.6%
Amazon: 3.6%
Alphabet: 3.5%
Meta Platforms: 2.5%
Berkshire Hathaway: 2.1%
Broadcom: 1.9%
Tesla: 1.6%
Eli Lilly: 1.5%
The S&P 500 advanced 173% in the last decade, compounding at 10.5% annually. If dividends are included, the index achieved a total return of 226% over the same period, increasing at 12.5% annually. At that pace, $500 invested monthly during the last 10 years would now be worth more than $105,000.
Importantly, while the U.S. economy suffered three recessions over the last 30 years, the S&P 500 generated a positive return over every rolling 11-year period during that time. Put differently, any investor that bought an S&P 500 index fund in the last three decades made a profit so long as they held the fund for at least 11 years.
Tom Lee is the head of research at Fundstrat Global Advisors. He manages the Fundstrat Granny Shots U.S. Large Cap ETF, an exchange-traded fund that holds about three dozen U.S. stocks worth at least $10 billion. Lee selects stocks by identifying market themes and applying quantitative models to companies that meet the inclusion criteria. The Granny Shots ETF has beat the S&P 500 by 4 percentage points since its inception.
Lee during an interview with Bloomberg last year made his case for why the S&P 500 could hit 15,000 by the end of the decade. First, millennials are the largest living generation and they are reshaping the economy as the enter their peak earnings years. In addition, they are set to inherit a whopping $80 trillion, the largest generational wealth transfer in history.
Second, the global labor shortage is estimated to be 80 million workers by 2030. That should create demand for artificial intelligence (AI) as a means of boosting productivity and automating workflows. Consequently, Lee anticipates a parabolic move in the technology sector, which currently accounts for 30% of the S&P 500.
“Between 1948 and 1967 there was a global labor shortage and technology stocks went parabolic,” Lee says. “And between 1991 and 1999 there was global labor shortage and technology stocks went parabolic. So this is what’s happening today.”
Here is the bottom line: Whether Lee is correct or not in predicting the S&P 500 will reach 15,000 by 2030, the index has consistently created wealth over long holding periods. That makes an S&P 500 index fund a smart choice for patient investors. And the Vanguard S&P 500 ETF is a particularly brilliant option because it has a cheap expense ratio of 0.03%. The average expense ratio on similar funds from other issuers is 0.75%, according to Vanguard.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Trevor Jennewine has positions in Amazon, Nvidia, Tesla, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, Tesla, and Vanguard S&P 500 ETF. The Motley Fool recommends Broadcom and 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.
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