New Research Says: The Biggest Gains of AI Won’t Go to AI Stocks. These 2 ETFs Could Be Better Buys.
New Research Says: The Biggest Gains of AI Won’t Go to AI Stocks. These 2 ETFs Could Be Better Buys.
Publish Date: 2026-07-04 13:20:00
Source Domain: www.theglobeandmail.com
Here are 6 key points summarizing the article from Vanguard’s research perspective on the future impact of AI productivity:
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Vanguard’s Outlook on AI Benefits: Vanguard’s June research suggests that the significant gains from AI-driven productivity may not go to the largest tech companies developing AI, but rather to U.S. value stocks and international developed-market stocks that are better positioned to leverage AI to enhance profits and efficiency.
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Vanguard Small-Cap Value ETF (VBR): This ETF has provided substantial returns, achieving around 27% over the past year and 15.9% in the first half of the current year. It offers diversification across small-cap companies with a sector mix including industrials and financials, which may benefit from AI productivity boosts. The fund has a low expense ratio of 0.05%.
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Vanguard International Dividend Appreciation ETF (VIGI): This ETF comprises 343 international stocks known for growing dividends annually. Although it has underperformed the S&P 500 over its 10-year history and in the last five years, it may still benefit from the potential AI gains in developed markets. It has a low expense ratio of 0.07% and includes notable stocks like Royal Bank of Canada and Nestlé.
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Caution on Value Stocks: Although the Vanguard Small-Cap Value ETF has shown good returns, historical data indicates value stocks often haven’t produced market-beating results in the long term. Investors should consider this caution when assessing the potential of this and similar funds.
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Analytical Team’s Recommendations vs. Vanguard ETFs: According to The Motley Fool Stock Advisor’s analysts, Vanguard Small-Cap Value ETF was not among their top 10 suggested stocks to buy, highlighting a divergence between Vanguard’s thesis and analyst-recommended stocks for potential high returns.
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Investment Implications: Despite Vanguard’s bullish outlooks on AI, investors should approach these funds with due diligence, considering their historical performance and the current market climate when determining if they fit into a future-oriented investment strategy.
