A Vanguard ETF That Values Growth
March 28th, 2012 at 2:00pm by Tom Lydon
Investors seeking exposure to growth in the markets will like the Vanguard Growth ETF (NYSEArca: VUG), which will help cut the guesswork of which companies to pick.
“Growth stocks show a different return pattern than value stocks, as the growth index had a correlation to its value index cousin of 0.91 over the past decade. That may sound high, but it is lower than the correlation between the comparable style indexes from S&P and Russell,” Michael Rawson wrote in a Morningstar analysis. [ETF Spotlight: U.S. Growth Stocks]
VUG does give investors exposure to higher growth, along with the more expensive half of the U.S. large-cap market. The fund is dedicated to mega-caps, or “titans,” that exhibit slow, steady growth, rather than the typical supercharge that is associated with this area of the market. Large stakes are usually found in technology and health-care rather than the financial or utility sectors, reports Rawson. [Are Stock ETFs Still Cheap After the Rally?]
Over the last 3-5 years, VUG has beaten the S&P 500 on average and the super low 0.12% expense ratio keeps it attractive, reports Selena Maranjian for The Motley Fool. [An ETF Trend Following Plan for All Seasons]
Some of the companies in VUG make this ETF worth another look. For example, Apple (NASDAQ: AAPL) ,which has risen 77% and is the most valuable company on the stock market today. Philip Morris International (NYSE: PM) has gained 40% and is poised to grow with emerging economies.
Vanguard Growth ETF
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.