Vanguard markets 103 exchange-traded funds (ETFs). Nearly half of them (49) delivered double-digit total returns over the last 12 months. A majority (88) generated positive total returns.
It's probably a safe bet that several funds in the Vanguard family will be big winners in 2026. But which Vanguard ETF is most likely to soar this year?
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Multiple excellent candidates
Predicting the top-performing Vanguard ETF for 2026 isn't easy. There are multiple excellent candidates.
For example, it's possible that the best Vanguard ETF of the last 12 months could keep its momentum going throughout this year. I'm referring to the Vanguard International High Dividend Yield ETF (VYMI 1.70%). As its name suggests, this ETF holds stocks from countries outside the U.S. that offer high dividend yields.
NASDAQ: VYMI
Key Data Points
Over the last 12 months, the Vanguard International High Dividend Yield ETF delivered a sizzling total return of more than 38%. Although the ETF pays a juicy dividend yield of around 3.7%, most of its return was driven by share appreciation.
ETFs focused on international stocks hold nine of the top 10 spots among Vanguard ETFs, based on performance over the last 12 months. One of them, the Vanguard FTSE Europe ETF (VGK 1.46%), could be an especially strong contender in 2026. This fund trailed the Vanguard International High Dividend Yield ETF by only a slight margin over the last 12 months, with a total return of nearly 36%.
If you're wondering which ETF took the lone top 10 spot that wasn't an international fund, I won't keep you in suspense. It was the Vanguard Communication Services ETF (VOX 1.74%), which delivered a total return of more than 26% over the last 12 months. This ETF owns 112 stocks in the communications services sector. Could it be the best Vanguard ETF for 2026? Maybe.
Most likely to soar
However, if I had to bet on which Vanguard ETF is most likely to soar in 2026, I'd go with the Vanguard Information Technology ETF (VGT 1.96%). Why? A quick look at the ETF's holdings provides a big clue.
NYSEMKT: VGT
Key Data Points
Nvidia (NVDA 1.53%), Apple (AAPL 1.93%), Microsoft (MSFT 0.75%), and Broadcom (AVGO 1.63%) collectively comprise nearly half (49.6%) of the Vanguard Information Technology ETF's portfolio. I have great expectations for all four of these stocks this year.
Some believe that the so-called AI bubble will soon burst. I disagree. My view is that the demand for AI applications will continue to grow in 2026, with the increased adoption of agentic AI serving as a significant tailwind.
If I'm right, Nvidia's momentum won't slow down as customers buy its GPUs hand over fist. Likewise, Broadcom should enjoy tremendous growth with fast-rising sales of its custom AI accelerators. Microsoft's Azure, the No. 2 cloud platform, is also likely to maintain its blistering pace of growth.
What about Apple? The company expects an all-time high in revenue for its December 2025 quarter, with iPhone sales surpassing previous records. Apple also reportedly plans to unveil its first AI-powered smart glasses later this year. Although the new devices may not begin shipping until early 2027, I believe the announcement of Apple's smart glasses could serve as a key catalyst for the stock.
The bottom line is that each of the Vanguard Information Technology ETF's top four holdings could be poised to deliver market-beating returns in 2026. If so, this ETF could easily become the biggest winner of the year among Vanguard funds.
What could go wrong
I'll readily admit that my prediction could fall flat on its face. For example, if AI demand plunges (or even merely plateaus) in 2026, the Vanguard Information Technology ETF would struggle. Should the U.S. economy enter a recession, the ETF is likely to decline rather than increase.
The Vanguard Information Technology ETF may perform well this year, but still lag behind other funds. Perhaps international stocks will continue their sizzling momentum, or another U.S. stock sector delivers exceptional gains.
Because of these possibilities, I wouldn't say that the Vanguard Information Technology ETF is the odds-on favorite to soar in 2026. However, I think this ETF's chances are as good or better than most other Vanguard ETFs.
