If you’re interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the VANGDSP5 GRWTH (VOOG), a passively managed exchange traded fund launched on 09/09/2010.
The fund is sponsored by Vanguard. It has amassed assets over $7.21 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Also, growth stocks are a type of equity that carries more risk compared to others. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.60%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector–about 42.60% of the portfolio. Consumer Discretionary and Telecom round out the top three.
Looking at individual holdings, Apple Inc. (AAPL) accounts for about 11.28% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN).
The top 10 holdings account for about 48.67% of total assets under management.
Performance and Risk
VOOG seeks to match the performance of the S&P 500 Growth Index before fees and expenses. The S&P 500 Growth Index measures the performance of large-capitalization growth stocks.
The ETF has added about 31.25% so far this year and is up about 37.12% in the last one year (as of 11/15/2021). In the past 52-week period, it has traded between $217.74 and $297.86.
The ETF has a beta of 0.99 and standard deviation of 24.01% for the trailing three-year period, making it a medium risk choice in the space. With about 244 holdings, it effectively diversifies company-specific risk.
Alternatives
VANGDSP5 GRWTH holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOOG is an excellent option for investors seeking exposure to the Style Box – Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The VIPERSGROWTH (VUG) and the Invesco QQQ (QQQ) track a similar index. While VIPERSGROWTH has $89.78 billion in assets, Invesco QQQ has $207.43 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit
Zacks ETF Center
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