3 Vanguard ETFs That Could Help You Retire a Millionaire

By offering broad exposure to the stock market over the long term, Vanguard exchange-traded funds (ETFs) prioritize simplicity over complexity -- without making sacrifices in performance. Today, Vanguard offers a diverse ETF lineup of 81 different products, spanning different sectors, investing styles, market caps, and geographies. 

Thanks to this range of products and their industry-leading low fees, Vanguard helps make attaining the coveted millionaire status that much easier. For those with patience and time on their side -- along with some appetite for risk -- here are three Vanguard ETFs that provide wannabe millionaires with the most potential. 

Vanguard Dividend Appreciation ETF

When it comes to building long-term wealth, dividends can play a valuable role in the journey to becoming a millionaire. While the Vanguard Dividend Appreciation ETF (VIG 0.10%) may have a slightly lower dividend payout compared to other dividend-focused ETFs, it still offers a considerable yield with the added benefit of healthy allocations to high-growth sectors.

One of the distinguishing features of the Vanguard Dividend Appreciation ETF compared to its peers is its emphasis on exposure to the technology sector. With 16% of the fund investing in tech companies, the ETF taps into the potential for significant growth and innovation. While this approach may come with increased risk, historical data shows that investing in tech has produced better long-term results for investors who have the time to ride out market fluctuations.

What sets the Vanguard Dividend Appreciation ETF apart is that the companies it holds have a history of increasing their dividend payouts over time. This is a crucial factor in accelerating the power of compound interest and compounding wealth. With a dividend growth rate that has consistently increased, investors can benefit from the compounding effect and see their wealth grow steadily over the years.

The ETF has delivered an impressive 137% return over the past decade, helped by such top holdings as United Health Group, Microsoft, JPMorgan, Coca-Cola, Home Depot, Procter & Gamble, and Visa. Not to mention, the ETF's dividend of $0.87 per share can help grow your portfolio even more. 

Vanguard Russell 1000 Growth ETF

The Vanguard Russell 1000 Growth ETF (VONG 1.77%) offers investors an opportunity to track the performance of the Russell 1000 Index, which represents the top 1,000 companies in the U.S. based on market capitalization. This index serves as a comprehensive benchmark for the growth potential of the U.S. stock market, encompassing a diverse range of sectors and industries.

Within the fund, companies with the largest market capitalizations hold the largest weight, ensuring that investors are exposed to the most significant players in the market. Notably, Apple and Microsoft dominate the top holdings, collectively accounting for nearly a quarter of the fund. 

In addition, the Vanguard Russell 1000 includes other prominent companies like AbbVie, Eli Lilly, Visa, and Mastercard. This blend of technology-focused stocks with companies from sectors such as consumer cyclical and healthcare provides a well-rounded portfolio with exposure to different growth drivers across various industries.

By including companies with smaller market caps, the Vanguard Russell 1000 Growth ETF gives investors the potential to seize growth opportunities from businesses that have ample room for expansion. Thanks to this strategic approach, the fund has delivered a remarkable 277% increase over the past decade.

Vanguard Mega Cap Growth ETF

The last candidate to make the cut is the Vanguard Mega Cap Growth ETF (MGK 1.87%). This ETF focuses on the largest of large companies and selects those that exhibit six growth characteristics: future long-term growth in earnings per share (EPS), short-term EPS growth, historical EPS growth, historical sales per share growth, current investment-to-assets ratio, and return on assets. The fund then allocates weights based on the composite score of these values. 

With a substantial 275% increase in value over the past 10 years, the Vanguard Mega Cap ETF has demonstrated its potential for long-term appreciation and could be the best option for investors looking for high growth. The fund's portfolio is heavily concentrated, with approximately 45% of its assets allocated to well-established technology giants such as Apple, Alphabet, Microsoft, Amazon, and Nvidia.

To diversify beyond the tech sector, the Vanguard Mega Cap ETF allocates approximately 40% of its holdings to companies in sectors such as consumer cyclicals and communication cervices. This approach allows investors to benefit from the potential of proven companies like Home Depot, T-Mobile, and Starbucks, while reducing the concentration risk associated with a tech-heavy portfolio.

By focusing on mega-cap companies with substantial market influence and significant resources for research and development, the Vanguard Mega Cap ETF provides investors with exposure to the forefront of technological advancements. These companies have the potential to revolutionize various sectors, including cloud computing, artificial intelligence, e-commerce, and many other innovations that will continue to shape the world we live in.