The market’s latest downturn has examined even essentially the most steadfast traders. With the Vanguard S&P 500 ETF (VOO 0.64%) — an exchange-traded fund (ETF) that tracks the efficiency of the benchmark S&P 500 — down practically 7% (on the time of this writing) in 2025 amid escalating commerce tensions, many traders are questioning their core holdings.
I’ve taken the other strategy. Particularly, I am actively rising my place within the Vanguard S&P 500 ETF throughout this pullback. Removed from a contrarian gamble, this resolution displays a conviction that three highly effective technological transformations will make at this time’s fears non permanent footnotes in a a lot bigger story of American innovation and development. Learn on to search out out extra.
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The data employee revolution is simply starting
Bear in mind when synthetic intelligence (AI) merely autocompleted your Google searches? These days are lengthy gone. In the present day’s AI techniques have advanced into true productiveness multipliers, essentially remodeling data work throughout each main {industry}.
Whereas headlines usually give attention to job displacement, the larger story is how AI is supercharging human functionality. Legal professionals utilizing AI assistants report finishing contract opinions in a fifth of the time. Software program engineers leveraging AI coding instruments are transport options twice as quick. Healthcare suppliers utilizing AI documentation platforms are seeing extra sufferers with much less administrative burnout — all in line with latest {industry} reviews.
This productiveness revolution advantages S&P 500 firms in two crucial methods. First, main AI know-how suppliers — Microsoft, Nvidia, and Amazon — comprise over 15% of the index. Second, most of the remaining 487+ firms are quickly adopting AI to enhance margins, speed up innovation, and ship higher buyer experiences.
The Vanguard S&P 500 ETF offers traders broad publicity to each the creators and adopters of those transformative applied sciences.
Bodily automation is fixing labor shortages
For many years, robotics overpromised and underdelivered — efficient in tightly managed environments however fragile in the actual world. Two main shifts are altering that: advances in machine studying and chronic labor shortages throughout developed economies.
In the present day’s robots, powered by AI, can deal with duties that after required human judgment. Warehouse robots now acknowledge and choose irregular objects from jumbled bins. Agricultural robots harvest particular person fruits at peak ripeness. Manufacturing robots adapt to produce variations without having reprogramming.
This evolution couldn’t have arrived at a greater time. With greater than two-million manufacturing positions poised to go unfilled within the U.S. by 2030, American firms are embracing automation to not substitute staff, however as a result of staff merely should not out there. The Vanguard S&P 500 ETF affords publicity to firms constructing this game-changing automation infrastructure and to producers integrating it to shut rising labor gaps.
Transportation is present process a once-in-a-century transformation
The third technological wave reshaping the economic system is the emergence of autonomous transportation. After years of slower-than-expected progress, a number of forces are driving a real inflection level.
Breakthroughs in basis fashions have dramatically improved laptop imaginative and prescient. Regulatory frameworks for autonomous autos are maturing throughout a number of states. In the meantime, driver shortages in logistics, transit, and ride-sharing are creating monumental incentives to speed up autonomy options.
The Vanguard S&P 500 ETF permits traders to take part throughout the complete autonomous worth chain — from chipmakers like Nvidia and Qualcomm, to car producers like Tesla and Basic Motors, to logistics firms like FedEx and UPS poised to chop transportation prices. The effectivity beneficial properties from driverless tech ought to considerably increase revenue margins and earnings over the steadiness of the last decade.
Constructing wealth by means of transformation
With an industry-leading 0.03% expense ratio and a 10-year common annual return of 12.4% by means of 2024, the Vanguard S&P 500 ETF affords an unparalleled mixture of efficiency and value effectivity. However the fund’s most vital power lies not in its historic returns however in its distinctive capacity to evolve with the economic system.
VOO Complete Return Stage knowledge by YCharts.
Once I spend money on the Vanguard S&P 500 ETF, I am not shopping for yesterday’s economic system; I am shopping for a repeatedly updating portfolio of America’s most modern and resilient companies. As older industries fade and newer ones emerge, the index refreshes to replicate the actual drivers of development.
What is the backside line? In the present day’s headlines round commerce tensions will ultimately fade. What will not fade is the relentless march of technological progress. By steadily shopping for the Vanguard S&P 500 ETF by means of this turbulence, I am positioning my portfolio to learn from the forces that can form the worldwide economic system within the subsequent decade and past.
John Mackey, former CEO of Complete Meals Market, an Amazon subsidiary, is a member of The Motley Idiot’s board of administrators. George Budwell has positions in Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Idiot has positions in and recommends Amazon, FedEx, Microsoft, Nvidia, Qualcomm, Tesla, and Vanguard S&P 500 ETF. The Motley Idiot recommends Basic Motors and United Parcel Service and recommends the next choices: lengthy January 2026 $395 calls on Microsoft and brief January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure coverage.
