If you want to invest in a bunch of growth stocks, but you don't yet have enough money to buy many of them, what do you do? Well, consider parking some or many of your long-term dollars in the Vanguard Growth ETF (VUG +0.72%).
As you may know, an exchange-traded fund (ETF) is a fund that trades like a stock, so you can easily invest in it via any good brokerage. Permit me to explain why the Vanguard Growth ETF is a particularly attractive ETF.
Image source: Getty Images.
Meet the Vanguard Growth ETF
The Vanguard Growth ETF tracks the CRSP U.S. Large Cap Growth index, which measures the performance of large-capitalization growth stocks. Vanguard is known for low fees, among other things, and this ETF is no exception, sporting a tiny expense ratio (annual fee) of just 0.03%. Here's how tiny that is: For every $10,000 you have invested in the ETF, you'll pay only $3 per year in fees.
The table below shows how the ETF has performed lately. I'm including the performance of the Vanguard S&P 500 ETF, as well, for comparison.
|
Fund |
5-Year Avg. Annual Return |
10-Year Avg. Annual Return |
15-Year Avg. Annual Return |
|---|---|---|---|
|
Vanguard Growth ETF |
15.42% |
18.26% |
16.38% |
|
Vanguard S&P 500 ETF |
14.10% |
15.56% |
14.50% |
Data source: Morningstar.com, as of June 3, 2026.
Considering that the S&P 500 has averaged annual returns close to 10% (ignoring inflation) over many decades, all those returns are well above average, reflecting the fact that we've been living through some heady years lately, stock market-wise. Still, the growth ETF clearly outperformed the S&P 500.
What is in the Vanguard Growth ETF?
Here are the Vanguard Growth ETF's recent top holdings. Interestingly, those are the same top 10 holdings as are in the Vanguard S&P 500 index fund -- only with greater weightings. They also include all seven of the "Magnificent Seven" stocks. So if you like these massive (mostly) tech stocks, the growth ETF gives you more of them.
|
Stock |
Percent of ETF |
|---|---|
|
Nvidia |
13.3% |
|
Apple |
11.53% |
|
Microsoft |
8.76% |
|
Alphabet Class A |
6.49% |
|
Broadcom |
5.20% |
|
Amazon.com |
5.11% |
|
Alphabet Class C |
5.11% |
|
Meta Platforms |
3.88% |
|
Tesla |
3.12% |
|
Eli Lilly |
2.31% |
Data source: Morningstar.com. As of June 3, 2026.
Is the Vanguard Growth ETF the right ETF for you?
This ETF has performed very well in recent years and is likely to continue doing well over the decade or more ahead. It might be a good fit for you if:
- You're not worried about a market crash or correction looming ahead -- because growth stocks will often tumble harder than other stocks when the market sinks, as it invariably does now and then.
- You like the idea of owning the 10 stocks above, and about 140 others that have also been growing briskly.
- You're more drawn to fast-growing companies (even if they've entered overvalued territory) and don't demand the margin of safety you can get with value stocks.
NYSEMKT: VUG
Key Data Points
Go ahead and consider this ETF for your portfolio. If you prefer less volatile investments, or want to balance this one with a more value-oriented fund, check out the Vanguard Value ETF (VTV +0.44%).
