The Vanguard Growth ETF (NYSE: VUG) fund employs an indexing investment approach designed to track the performance of the index, a broadly diversified index predominantly made up of growth stocks of large U.S. companies. The advisor attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index.
- Net Assets: $172.72 billion
- NAV: 269.86
- Dividend yield: 0.61%
- YTD Daily Total Return: 27.18%
- Expenses: 0.04%
The Vanguard Growth ETF charges 0.04% annually, providing investors a low-cost option to invest in large-cap growth stocks. And at Net Assets of 172.72 billion, it’s one of the largest growth ETF to buy.
This fund tracks the performance of the CRSP US Large Cap Growth Index, which classifies growth stocks using six factors, including three-year historical growth in earnings per share and sales per share, as well as return on assets. The result is a diversified group of 235 large-cap growth stocks with a median market capitalization of $526.3 billion. In other words, the average VUG holding is a mega-cap stock.
Tech stocks account for more than half (52.0%) of the fund’s total net assets, with consumer discretionary and industrial stocks the next highest sector weightings at 21% and 9%, respectively. VUG’s top 10 holdings make up 53% of the fund’s total net assets and are led by Apple, Microsoft and Amazon.com.
The growth characteristics are apparent. The portfolio’s typical stock has averaged 23% earnings growth over the past five years – and they’re priced like it, trading at 36 times trailing-12-month profits and 8.9 times book value.
VUG, whose annual turnover is very low at 5%, has averaged an annualized total return of 13.8% over the past decade, 185 basis points higher than SPY. However, that lead has widened in 2023 amid a resurgent appetite for growth stocks.