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.