Should Vanguard S&P 500 Growth ETF (VOOG) Be on Your Investing Radar?

launched on 09/09/2010, the Vanguard S&P 500 Growth ETF (VOOG) 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 $7.02 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

Large cap companies typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Further, growth stocks have a higher level of volatility associated with them. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.

Cost

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF’s expense ratio.

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 0.61%.

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 43.60% of the portfolio. Consumer Discretionary and Telecom round out the top three.

Looking at individual holdings, Apple Inc. (AAPL) accounts for about 11.28% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN).

The top 10 holdings account for about 48.67% 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 has lost about -12.52% so far this year and it’s up approximately 13.04% in the last one year (as of 01/24/2022). In the past 52-week period, it has traded between $221.65 and $305.94.

The ETF has a beta of 0.99 and standard deviation of 23.58% for the trailing three-year period, making it a medium risk choice in the space. With about 244 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard S&P 500 Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VOOG is a sufficient option for those seeking exposure to the Style Box – Large Cap Growth area of ​​the market. Investors might also want to consider some other ETF options in the space.

The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $78.82 billion in assets, Invesco QQQ has $188.01 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.

Infrastructure Stock Boom to Sweep America

A massive push to rebuild the crumbling US infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.

The only question is “Will you get into the right stocks early when their growth potential is greatest?”

Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.

Download FREE: How to Profit from Trillions on Spending for Infrastructure >>

Click to get this free report

Vanguard S&P 500 Growth ETF (VOOG): ETF Research Reports

Amazon.com, Inc. (AMZN): Free Stock Analysis Report

Apple Inc. (AAPL): Free Stock Analysis Report

Microsoft Corporation (MSFT): Free Stock Analysis Report

Invesco QQQ (QQQ): ETF Research Reports

Vanguard Growth ETF (VUG): ETF Research Reports

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Leave a Comment

Your email address will not be published.