News about Vanguard

As of Sept. 30, Nvidia, Apple, Alphabet, Microsoft and Amazon made up 30.8% of VOO and 49.2% of VUG. The article argues the Vanguard Morningstar Total Stock Market ETF (VTI), holding 3,519 stocks, offers less concentration, with those five at 27.2% and the top ten at 36%. Because the S&P 500 makes up roughly 80% of the U.S. stock market, VTI's performance has been close to VOO's, with year-to-date returns of 12.5% versus 12.9% and five-year total returns of 73.2% versus 83%. All three ETFs have a 0.03% expense ratio. The author considers VTI a better catch-all option for investors seeking U.S. market exposure with less reliance on mega-cap growth stocks tied to AI.

The article argues that Vanguard's VOO, VUG and VGT overlap heavily because the same mega-cap tech companies sit near the top of each. Over ten years VGT returned 799.70%, VUG 429% and VOO 324.46%, but the gap reflects one factor, mega-cap tech, held at different concentration levels. VOO has 38.0% of net assets in information technology and VUG 65.9% in technology, while VGT tracks a technology-only index. In the past week VOO fell 1.4%, VUG 3% and VGT 5%, showing that the most concentrated fund dropped the most. The author advises checking each fund's top ten holdings and converting fund weights into portfolio weights to measure real exposure.

The article presents the Vanguard Total International Stock ETF (VXUS) as a diversification option, holding 8,790 international stocks with Japan making up 15.5% of the fund. Its four largest holdings, Taiwan Semiconductor, Samsung Electronics, SK Hynix and ASML, account for just 8.7% of the fund, compared with 26.2% for the top four holdings of the Vanguard S&P 500 ETF (VOO). VXUS has a P/E of 16.2 and a 2.3% yield, versus 25.2 and 1.1% for VOO, and charges a 0.05% expense ratio against VOO's 0.03%. With $164.9 billion in net assets, VXUS is substantial in its own right, while VOO is the largest in the world at $1 trillion.

The article says the Vanguard Morningstar Growth ETF (VUG) has outperformed the S&P 500 in 14 years since it began trading in January 2004. By comparison, SPIVA data show less than 11% of actively managed funds beat the S&P 500 over five years. VUG's technology weighting is 69.8%, with the Magnificent Seven making up over 56% of the fund. About 84% of its holdings are in the S&P 500, and nine of its top 10 holdings overlap, so the concentration offers an edge but also higher risk. The author attributes this edge to leading companies continuing to grow, and notes that investors already holding an S&P 500 ETF should watch this concentration risk.

The Vanguard Morningstar Value ETF (VTV) is up about 18% this year versus about 13% for the Growth ETF (VUG), but the value fund has finished a calendar year ahead of the growth fund only three times since 2012. Most of its lead was built in the first quarter, when the gap reached roughly 14 percentage points; by June 30 it had narrowed to 9 points, and it was about 5 points as of writing. As of Aug. 31, the value fund's stocks traded at around 21 times earnings versus 31 times for the growth fund, which is more concentrated, with its top 10 holdings making up about 63% of assets. The author argues this year's returns should not alone decide between the two, and that owning both may be sensible for investors who cannot choose.

A $10,000 investment in VUG on Oct 31, 2007, which fell 51% at its low, is now worth $100,122, or about 13% a year, versus $71,189 in SPY. The Nov 19, 2021 peak fell 36% and took 795 days to recover; it is now worth $17,350 against $17,742 in SPY, the only tested entry point where VUG still trails the S&P 500. A 23% drop in early 2025 during the tariff sell-off recovered in 125 days, leaving the holding roughly even with SPY at $12,959 versus $12,944. The predecessor Vanguard Growth Index Fund Investor Shares, bought at the Mar 27, 2000 peak, took about 12.5 years to break even after a 56% decline. The article says VUG best suits investors with at least a decade ahead, since its top holdings NVIDIA, Apple and Microsoft make up 36% of the fund.

The author says they would pick the Vanguard International High Dividend Yield ETF (VYMI) if they could hold only one dividend ETF for the next 30 years. The fund has a 3.68% trailing 12-month dividend yield and a P/E of 13.3, about 43% cheaper than the S&P 500, and it has significantly outperformed the index over the past year. Vanguard projects international stocks will beat U.S. stocks over the next 30 years, with developed markets forecast at 6.2% to 8.2% annualized returns versus 4.9% to 6.9% for U.S. equities. VYMI holds 1,567 stocks from 45 countries, mostly in developed markets such as Japan (12.2%) and the UK (11%). The author argues AI's gains could spread to steady sectors like banks, pharma and consumer staples, though there is no guarantee VYMI will beat U.S. stocks.