The Vanguard Total Stock Market ETF invests in all companies listed on US stock exchanges, making it one of the most diversified funds money can buy.
Extreme diversification can reduce risk and volatility, but it can also lead to lower returns compared to more concentrated portfolios.
However, the Vanguard Total Stock Market ETF can help patient investors build a million-dollar fortune over the long term.
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Investors looking for a highly diversified exchange-traded fund (ETF) in 2026 might consider the Vanguard Total Stock Market ETF(NYSEMKT: VTI). Track the performance of the US Total Market CRSP IndexIt invests in the 3,498 companies listed on US stock exchanges, so it’s basically a complete portfolio on its own.
That means it offers exposure to powerful artificial intelligence (AI) stocks like NVIDIA and Amazonbut also small cap growth stories like Lemonadewhich shot up 95% last year.
Highly diversified ETFs typically generate lower returns than ETFs that track more concentrated indices such as the S&P 500(SNPINDEX: ^GSPC) or the Nasdaq-100but they also produce much less volatility. That said, the Vanguard Total Stock Market ETF can still deliver life-changing results for investors who buy it in 2026. Here’s how you could become a long-term millionaire creator.
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The Vanguard Total Stock Market ETF is weighted by market capitalization, so the most valuable companies in the fund have a greater influence on its performance than the less valuable ones. As a result, its three main holdings are AppleNVIDIA and microsoftwhich have a combined value of $12.3 trillion.
Therefore, despite having almost 3,500 holdings, 18.1% of the total value of this Vanguard ETF is parked in just those three high-flying stocks. But while that may seem like a big number, those three stocks have a much larger weighting: 20.8% in the S&P 500 and 36.3% in the Nasdaq-100. That’s partly why the Vanguard ETF has underperformed those indices over the past five years:
^NDX data by YCharts
That said, the broader technology sector has a strong 38.5% weighting in the Vanguard ETF. The sector not only includes Apple, Nvidia and Microsoft, but also other powers such as Broadcom, Oracle, Palantir Technologiesand Advanced Microdevices. Simply put, this ETF offers investors broad exposure to the rise of AI.
Plus, it has a number of promising growth stocks at the smaller end of the market, which you won’t find at all in the S&P 500 or Nasdaq-100:
Lemonade, an insurance technology company that uses AI to calculate premiums, process claims and transform the customer experience
Sustainableleader in the exposure management segment of the cybersecurity industry
Serve roboticswhich develops last mile logistics solutions in partnership with Nvidia and Uber Technologies
Sprout Farmers Marketwhich operates 460 organic grocery stores in 24 US states (and is growing rapidly)
The Vanguard Total Stock Market ETF has produced a compound annual return of 9.2% since its inception in 2001. But it has generated accelerated annual returns of 14.2% over the past decade, primarily due to incredible growth in areas like technology.
Here’s how long it could take to turn a one-time investment of $50,000 today into $1 million, based on three different annual returns.
Compound Annual Return
It’s time to reach a million dollars
9.2%
34 years
11.7% (midpoint)
28 years
14.2%
23 years
Calculations by author.
But for investors who don’t want to shell out $50,000 in 2026, here’s how long it could take to build a million-dollar fortune by consistently investing just $500 a month in this long-term ETF:
Compound Annual Return
It’s time to reach a million dollars
Total deposits
9.2%
31 years
$186,000
11.7% (midpoint)
26 years
$156,000
14.2%
23 years
$138,000
Calculations by author.
To be clear, it’s probably unrealistic to expect the Vanguard ETF to maintain its accelerating 14.2% annual return forever. But given the momentum in the AI ​​space, above-average returns are certainly possible for at least the next few years, especially if the benefits of this revolution continue to trickle down to the smaller end of the stock market.
However, this Vanguard ETF could still become a million-dollar maker in just 31 years, even if it returns to its long-term average annual return of 9.2%.
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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool holds and recommends Advanced Micro Devices, Amazon, Apple, Lemonade, Microsoft, Nvidia, Oracle, Palantir Technologies, Serve Robotics, Sprouts Farmers Market, Uber Technologies, and Vanguard Total Stock Market ETF. The Motley Fool recommends Broadcom and recommends the following options: long $395 January 2026 calls on Microsoft, long $75 January 2028 calls on Sprouts Farmers Market, short $405 January 2026 calls on Microsoft, and short $85 January 2028 calls on Sprouts Farmers Market. The Motley Fool has a disclosure policy.
Could Buying the Vanguard Total Stock Market ETF in 2026 Make You a Millionaire? was originally published by The Motley Fool
