Exchange-traded funds (ETFs) have grown in popularity over the past decade or two, and for good reason. Just like mutual funds, they let you invest in a range of stocks (or other things) with one simple investment -- and they often sport lower expense ratios (annual fees), too. ETFs also make investing easy by trading like stocks throughout the day in the stock market.
One particularly popular ETF is the Vanguard Value ETF (VTV -0.87%). I do like it myself, but I'm a bit more jazzed by the Vanguard Growth ETF (VUG -0.40%). Here's a look at both. See which one(s) you like.
Image source: Getty Images.
First, let's tackle performance. You can see how each has fared in the table below, and I'll include an also-excellent S&P 500 index fund, the Vanguard S&P 500 ETF (NYSEMKT: VOO), for comparison:
ETF | 5-Year Avg. Annual Return | 10-Year Avg. Annual Return | 15-Year Avg. Annual Return |
---|---|---|---|
Vanguard Value ETF | 15.11% | 10.60% | 12.31% |
Vanguard Growth ETF | 16.77% | 16.08% | 16.77% |
Vanguard S&P 500 ETF | 16.35% | 13.54% | N/A |
Sources: Morningstar.com, as of July 7, 2025. ETF = exchange-traded fund.
Before you write off the Vanguard Value ETF because of its slower growth, keep reading. The ETF is offering a different proposition than the other ETFs. It's focused on value -- meaning it's not chasing high-flying stocks and buying them at sometimes inflated prices. Instead, it's focused on seemingly undervalued stocks, ones that offer a margin of safety.
For anyone skittish about stocks in general, or just today, given that our economy is facing tariff complications, among other things, this ETF should provide some relief. If the market suddenly heads south (as it has always done every few years), value stocks will often drop less severely than their more richly valued counterparts. Here are some more things to know about the ETF:
Company | Weight in Index |
---|---|
3.59% | |
3.40% | |
ExxonMobil | 2.07% |
Walmart | 2.03% |
Procter & Gamble | 1.86% |
Johnson & Johnson | 1.74% |
The Home Depot | 1.71% |
1.53% | |
Bank of America | 1.34% |
Philip Morris International | 1.31% |
Source: Morningstar.com, as of May 31, 2025.
The Vanguard Growth ETF has an admirable track record, topping the other two ETFs above. Thus, many people, myself included, will be drawn to it, imagining our own portfolios growing at above-average rates. Still, it's important to remember that the stock market is volatile, and not every year will feature double-digit gains for this (or other) ETFs.
Indeed, in market downturns, growth stocks can have further to fall. Check out how the ETFs fared in 2022 and 2023:
ETF | 2022 Return | 2023 Return |
---|---|---|
Vanguard Value ETF | (2.07%) | 9.32% |
Vanguard S&P 500 ETF | (18.19%) | 26.32% |
Vanguard Growth ETF | (33.15%) | 46.83% |
Sources: Morningstar.com, as of July 7, 2025. ETF = exchange-traded fund.
There's a clear risk-and-reward trade-off there, right? That's why you might want to spread your dollars across several different kinds of ETFs to diversify by risk and return. Here are some more things to know about the Vanguard Growth ETF:
Company | Weight in Index |
---|---|
11.32% | |
10.30% | |
10.08% | |
6.29% | |
Meta Platforms | 4.37% |
3.97% | |
3.32% | |
Alphabet Class A | 3.21% |
Alphabet Class C | 2.59% |
2.21% |
Source: Morningstar.com, as of May 31, 2025.
Clearly, that's a different bunch of companies, including all the "Magnificent Seven" -- Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Facebook parent Meta Platforms, and Tesla. If you would like to be part-owner of those companies -- and more than 150 others -- without having to buy into lots of companies, you might want to park some of your dollars in this ETF.
So, really, both of these are solid, low-fee ETFs with a lot going for them. Think about which might serve you best.
免责声明:投资有风险,本文并非投资建议,以上内容不应被视为任何金融产品的购买或出售要约、建议或邀请,作者或其他用户的任何相关讨论、评论或帖子也不应被视为此类内容。本文仅供一般参考,不考虑您的个人投资目标、财务状况或需求。TTM对信息的准确性和完整性不承担任何责任或保证,投资者应自行研究并在投资前寻求专业建议。