2 Vanguard ETFs Using Momentum to Outpace the S&P 500
2026-07-18 18:30
•Stefon Walters •The Motley Fool
••••• •••••• Axe Capital view
Momentum ETFs Outperform But Watch Rand and Energy Risks
Vanguard’s tech and energy ETFs lead the US market, with clear implications for JSE investors and the rand.
Vanguard’s Information Technology ETF (VGT) and Energy ETF (VDE) are beating the S&P 500 this year, largely on momentum in AI-driven semiconductors and Middle East energy tensions. For South African investors, this spells caution and opportunity. The tech surge, led by Nvidia and Apple, doesn’t directly translate to the JSE. Prosus and Naspers offer exposure but have struggled to match US tech’s pace, so I’d avoid chasing these here. The stronger signal is from energy. Sasol stands to gain if energy prices stay firm, but locals should watch the rand closely. A stronger dollar against the rand typically means more pressure on costs and inflation, offsetting gains. Currently, USD/ZAR remains volatile amid global uncertainty. If the Middle East tensions escalate, energy prices might spike further, pushing Sasol and rand-hedged miners higher. But if cooler heads prevail, these outsized moves could correct sharply. this is just my opinion and not financial advice
I’d watch Sasol for potential gains from global energy volatility and hold off on local tech stocks like Prosus until we see stronger signs of a tech rebound. Hedge USD/ZAR risk prudently.
- Sasol
- USD/ZAR
- Easing Middle East tensions
- Rand strength reducing energy price benefits
6/10
Two Vanguard ETFs are outperforming the S&P 500 this year: the Information Technology ETF (VGT), up 21% driven by semiconductor companies benefiting from AI demand, and the Energy ETF (VDE), benefiting from Middle East conflicts and elevated energy prices. Both ETFs are concentrated in top holdings but positioned to finish ahead of the S&P 500.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Stefon Walters
Categories: Geopolitics, Technology, AI, Semiconductors, Equities
Tickers: VGT, VDE, NVDA, AAPL, MSFT, CVX
Sentiment: Mixed - Up 21% year-to-date, significantly outperforming S&P 500's 10%. Strong performance driven by semiconductor holdings (Micron, AMD, Applied Materials) benefiting from AI boom and data center demand. Best-performing S&P 500 sector this year due to Middle East conflicts and elevated energy prices. Top holdings ExxonMobil and Chevron performing well, expected to finish ahead of S&P 500.
Keywords: Vanguard ETFs, momentum investing, semiconductor boom, AI demand, energy sector, S&P 500 outperformance
Insights:
- VGT: Positive: Up 21% year-to-date, significantly outperforming S&P 500's 10%. Strong performance driven by semiconductor holdings (Micron, AMD, Applied Materials) benefiting from AI boom and data center demand.
- VDE: Positive: Best-performing S&P 500 sector this year due to Middle East conflicts and elevated energy prices. Top holdings ExxonMobil and Chevron performing well, expected to finish ahead of S&P 500.
- NVDA: Positive: Up 10% year-to-date with 16.10% weighting in VGT. Major beneficiary of AI boom and semiconductor demand.