Key Points
The Vanguard Morningstar Growth ETF has been growing faster than the S&P 500 over many years.
It's a rather concentrated fund, full of growth stocks.
Anyone seeking to grow their wealth without spending hours studying the universe of stocks and making frequent buy-and-sell decisions should consider the Vanguard Morningstar Growth ETF (NYSEMKT: VUG). This compelling exchange-traded fund (ETF) -- a fund that trades like a stock -- is focused on growth.
Image source: Getty Images.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
Here's the kind of growth I'm talking about -- compared to the annual performance of the venerable Vanguard S&P 500 ETF (NYSEMKT: VOO):
Time |
Vanguard Growth ETF |
Vanguard S&P 500 ETF |
|---|---|---|
Past five years |
11.92% |
12.65% |
Past 10 years |
17.65% |
15.31% |
Past 15 years |
16.58% |
15.06% |
Data source: Morningstar.com as of Sept. 15, 2026.
The fund did lag the S&P 500 over the past five years, but otherwise it has performed quite well.
How will you do if you plunk $2,500 into the ETF now and hang on for 20 years? Well, no one can know for sure, but history suggests it's a promising proposition. Let's use a conservative rate and assume that the ETF grows at an annual average rate of 12%. If so, that $2,500 stake will grow to $24,116 (thanks to compounding).
Meet the Vanguard Morningstar Growth ETF
The Vanguard Morningstar Growth ETF tracks the CRSP U.S. Large Cap Growth Index, which focuses on large companies growing at faster-than-average rates. Its great performance should be no surprise, then. Keep in mind that whenever the market corrects or crashes, such growth stocks tend to fall especially hard. Of course, eventually both the market and many fallen stocks recover and reach new highs.
The ETF's recent top holdings include Nvidia, Apple, and Microsoft, together making up 36% of the fund's value -- and the top 10 holdings account for 64% of the ETF.
If you invest in this fund, most of your money will go to just the top 10 holdings. That's bad if you want more diversification -- but it's good if you want to own a bunch of fast-growing companies.
If you're seeking growth in a somewhat diversified manner, give this ETF a closer look.
Selena Maranjian has positions in Apple, Microsoft, Nvidia, and Vanguard Morningstar Growth ETF. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, Vanguard Morningstar Growth ETF, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.