The beauty of exchange-traded funds (ETFs) is that they allow investors to cover a lot of ground with a single investment. Although broad ETFs generally don't experience the hypergrowth returns you might achieve with a single outstanding company's stock, some funds have consistently outperformed the market. If you're looking for an ETF that has shown it has the potential to create millionaires, consider the Vanguard Information Technology ETF ( VGT 2.
15% ) . Since its inception 20 years ago, it has averaged over 13% annual total returns. Over the past decade, the performance has been even more impressive, with an annualized total return surpassing 20%.
VGT data by YCharts. Past performances don't guarantee future results, but if we assume this trend continues, the ETF could carry investors who have time on their side to the seven-figure promised land. If one takes the middle ground between the ETF's average returns from inception and the past decade (say, 16% annualized returns), a person who invested $500 monthly in it could see the value of their position cross the $1 million mark in around 23 years.
With a more conservative projection of 13% annualized returns, they could do so in around 26 years. The one sector leading the way for the U.S.
market S&P Dow Jones Indices (the joint venture behind the market's most well-known indexes) and MSCI have created a widely used system called the Global Industry Classification Standard, under which they classify all public companies. .
