Should Vanguard Growth ETF (VUG) Be on Your Investing Radar?

Launched on 01/26/2004, the Vanguard Growth ETF (VUG) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Growth segment of the US equity market.The fund is sponsored by Vanguard. It has amassed assets over $150.99 billion, making it one of the largest ETFs attempting to match the Large Cap Growth segment of the US equity market.Why Large Cap GrowthCompanies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.CostsExpense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.Annual operating expenses for this ETF are 0.04%, making it the least expensive products in the space.It has a 12-month trailing dividend yield of 0.48%.Sector Exposure and Top HoldingsWhile ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation to the Information Technology sector--about 48.70% of the portfolio. Telecom and Consumer Discretionary round out the top three.Looking at individual holdings, Apple Inc (AAPL) accounts for about 13.01% of total assets, followed by Microsoft Corp (MSFT) and Nvidia Corp (NVDA).The top 10 holdings account for about 51.94% of total assets under management.Performance and RiskVUG seeks to match the performance of the CRSP U.S. Large Cap Growth Index before fees and expenses. The CRSP US Large Cap Growth Index represents the growth companies of the CRSP US Large Cap Index.The ETF has added roughly 31.71% so far this year and was up about 43.77% in the last one year (as of 11/11/2024). In the past 52-week period, it has traded between $288.34 and $408.08.The ETF has a beta of 1.12 and standard deviation of 23.45% for the trailing three-year period, making it a medium risk choice in the space. With about 189 holdings, it effectively diversifies company-specific risk.AlternativesVanguard Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VUG is an outstanding option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.The iShares Russell 1000 Growth ETF (IWF) and the Invesco QQQ (QQQ) track a similar index. While iShares Russell 1000 Growth ETF has $103.49 billion in assets, Invesco QQQ has $309.84 billion. IWF has an expense ratio of 0.19% and QQQ charges 0.20%.Bottom-LineAn increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Vanguard Growth ETF (VUG): ETF Research Reports Apple Inc. (AAPL): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Invesco QQQ (QQQ): ETF Research Reports iShares Russell 1000 Growth ETF (IWF): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks