If you’re interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Vanguard S&P 500 Growth ETF (VOOG – Free Report) , a passively managed exchange traded fund launched on 09/09/2010.
The fund is sponsored by Vanguard. It has amassed assets over $14.49 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don’t perform as strongly in almost all other financial environments.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.49%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund’s holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector–about 49.40% of the portfolio. Consumer Discretionary and Telecom round out the top three.
Looking at individual holdings, Apple Inc (AAPL – Free Report) accounts for about 12.75% of total assets, followed by Microsoft Corp (MSFT – Free Report) and Nvidia Corp (NVDA – Free Report) .
The top 10 holdings account for about 49.27% of total assets under management.
Performance and Risk
VOOG seeks to match the performance of the S&P 500 Growth Index before fees and expenses. The S&P 500 Growth Index measures the performance of large-capitalization growth stocks.
The ETF return is roughly 0% so far this year and it’s up approximately 35.84% in the last one year (as of 01/01/2025). In the past 52-week period, it has traded between $262.92 and $380.50.
The ETF has a beta of 1.07 and standard deviation of 21.76% for the trailing three-year period, making it a medium risk choice in the space. With about 238 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard S&P 500 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, VOOG is a great 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 Vanguard Growth ETF (VUG – Free Report) and the Invesco QQQ (QQQ – Free Report) track a similar index. While Vanguard Growth ETF has $153.99 billion in assets, Invesco QQQ has $314.21 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.
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