Vanguard S&P 500 Growth ETF Outperforms S&P 500 ETF
In the long term many growth stocks have proven to be winners for investors. Such is the case for the Vanguard S&P 500 Growth ETF (VOOG), which holds 232 growth stocks included in the S&P 500. As the chart below shows, VOOG has consistently outperformed the SPDR® S&P 500® ETF Trust (SPY), which holds all S&P 500 stocks. The chart assumes that a $1,000 one-time investment was made in each ETF in October 2010 - VOOG's inception date was September 7, 2010. As of August 30, 2024, the value of VOOG is $7,194 (15.23% annualized return) and the value of SPY is $6,144 (13.93% annualized return). These values assume all dividends were reinvested.
How does VOOG achieve these results?. Growth stocks tend to have higher price to earning ratios (P/E) than non-growth stocks like value and income stocks. Also, VOOG holds fewer stocks than SPY so each stock in VOOG has a higher weight than the same stock in SPY. For example, Apple (APPL) has a 12.28% weighting in VOOG and a 7.04% weighting in SPY.
See Vanguard Growth ETF Outperforms S&P 500 ETF.
See Vanguard Information Technology ETF Outperforms S&P 500 ETF.Related Calculators
Stock Return Calculator: Compare Returns for Two Stocks
Posted August 31, 2024