Vanguard Growth ETF Wins Long-Term Backing After Beating S&P 500 by 1.2 Points Since 2004
Updated
Updated · The Motley Fool · Aug 18
Vanguard Growth ETF Wins Long-Term Backing After Beating S&P 500 by 1.2 Points Since 2004
3 articles · Updated · The Motley Fool · Aug 18
Summary
Vanguard Morningstar Growth ETF is being pitched as a buy-and-hold option for young investors after posting a 12% annualized return since 2004, versus 10.8% for the S&P 500.
That edge is tied to a concentrated growth portfolio: 69.2% of VUG assets sit in technology, with major exposure to AI-linked chipmakers, cloud platforms and software companies.
Top holdings include Nvidia, Microsoft, Amazon, Alphabet, Meta, Tesla, Broadcom and AMD, while recent growth figures cited include Broadcom AI chip sales up 143%, AMD data-center revenue up 107% and Nvidia data-center revenue up 92%.
A $20,000 investment at age 25 would grow to about $1.86 million by age 65 at 12%, compared with roughly $1.21 million at 10.8%—a gap of more than $650,000.
The case for holding VUG long term also rests on quarterly index rebalancing and continued growth themes in AI, robotics, autonomous vehicles and quantum computing, despite higher volatility than broader indexes.
When tech giants burn billions in negative cash flow for AI, will this popular fund's quarterly rebalancing save your retirement from a crash?
Are hyperscalers building the future of wealth, or simply inflating a historic tech bubble that could devastate concentrated portfolios when spending slows?