The Vanguard Growth ETF Outpaced the S&P 500 by 2 Percentage Points Annually Over a Decade

Investors using the Vanguard Growth ETF (VUG) achieved a 16% average annual return over the past 10 years, compared to 14% for the S&P 500. This outperformance is driven by a strategy that targets growth stocks, which typically outperform value stocks over the long term. The fund tracks the CRSP U.S. Large Cap Growth Index, which selects holdings based on six factors: expected long-term and short-term growth in earnings per share, three-year historical growth in earnings per share and sales per share, and current investment-to-assets ratio and return on assets. The Vanguard Growth ETF is 15% more volatile than the S&P 500, with a 10-year beta of 1.19. The S&P 500 has a 10-year annualized return of 14%.