1 Unstoppable Vanguard ETF That Turned $10,000 Into More Than $40,000 in the Last Decade

The S&P 500 gets most of the attention from the investment community, as it’s the most widely followed market index. This gives investors a high-level view of how major U.S. stocks are performing.

But there are other options out there that can provide more nuanced exposure and the potential for better returns. The Vanguard Growth ETF (NYSEMKT: VUG) is just one example.

A $10,000 investment in this exchange-traded fund a decade ago would be worth roughly $41,000 as of Feb. 2, 2024, a return that includes dividends. This meaningfully outpaces the 244% gain of the S&P 500.

It’s all about growth

The Vanguard Growth ETF gives investors exposure to large-cap growth-oriented businesses. There are 208 different stocks in the portfolio, all of which generally post faster revenue and earnings gains than the companies that are excluded. The average company in the ETF has reported 20% annualized bottom-line growth in the last five years.

Technology and consumer discretionary stocks reign supreme, and combined make up 75% of the ETF’s assets. Investors are undoubtedly familiar with some of the top holdings. The “Magnificent Seven” businesses together represent just under 28% of the ETF.

Apple is the top holding. Its shares have skyrocketed 937% in the last 10 years. Tesla is up 1,490% in the past decade, even though it’s currently 54% below its peak price.

But none of these companies hold a candle to Nvidia. The artificial intelligence (AI)-focused hardware enterprise’s shares have soared an incredible 17,000% since February 2014, certainly helping to propel the ETF’s rise. Of course, huge sales gains have been a key ingredient of these returns. It’s hard to find a better-performing stock than this.

Investors who want to benefit from above-average growth potential, with access to some of the most innovative businesses, should consider the Vanguard Growth ETF. While the risk and volatility might be higher, you have the chance to outperform the S&P 500 over the long haul.

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