1 Unstoppable Vanguard Growth ETF Up 14% in 2026 to Buy and Hold for the Next 20 Years
Value investing is taking its lumps, and that’s been the case for a while. Yes, various styles move in and out of favor over the years, but the stark reality is that the tide has favored growth stocks for the better part of two decades now.
The Vanguard S&P 500 Growth ETF (VOOG -0.13%) is an exchange-traded fund (ETF) for long-term investors seeking growth equity exposure without the stock-picking burden today.
This ETF is ideal for investors searching for a long-term core holding. Image source: Getty Images.
As its name implies, this $27.1 billion growth ETF tracks the S&P 500 Growth index, the growth offshoot of the S&P 500. Don’t worry if you’re new to ETFs or index funds because the mechanics of this gauge are easy to understand. Stocks in the growth index and thus the Vanguard S&P 500 Growth ETF are evaluated on momentum, revenue growth, and “the ratio of earnings change to price.” Now let’s get into the details about why this fund could add value to portfolios over the next 20 years.
Growth and quality
As artificial intelligence (AI) has gained more importance and momentum, allusions to the bursting of the tech bubble in 2000 have become more frequent. Market participants love historical comparisons, and some love bubble talk, but the AI/tech bubble comparison has some flaws, including the point that many of today’s tech leaders, including stocks residing in the Vanguard S&P 500 Growth ETF, are highly profitable companies. That wasn’t the case back in 2000.
Good news for investors considering this ETF: The combination of quality business models and strong profitability within a growth-stock wrapper is a recipe for long-term durability and upside. Companies with high return on assets (ROA), which measures how firms use their assets to turn profits, have proven durable over the long haul.
Some of today’s ROA leaders among U.S.-based companies are Nvidia, Apple, Alphabet, Microsoft, and Amazon. That quintet accounts for about 45% of the Vanguard S&P 500 Growth ETF’s portfolio.
Vanguard Admiral Funds – Vanguard S&P 500 Growth ETF
Today’s Change
(-0.13%) $-0.11
Current Price
$84.50
Key Data Points
AUM
$26B
Dividend Yield
2.14%
Expense Ratio
0.07%
Top Holdings
NVDA
13.94%
MSFT
9.90%
AAPL
6.50%
They’re also among the most cash-rich U.S. companies, as are several other members of this ETF’s roster. At the same time, this growth ETF is steeped in quality metrics that support its status as a core holding for long-term investors.
Some economic protection, too
This Vanguard ETF could prove valuable to investors on another front. Conventional investing wisdom dictates that when economic growth slows, market participants should embrace less economically dependent sectors, such as consumer staples and utilities.
However, as the growth rally ages, more investors (and perhaps economists) are awakening to the fact that when economic growth slows, market participants put a premium on accessing noncyclical growth and wide competitive moats. Those are boxes checked by an array of the Vanguard S&P 500 Growth ETF’s 148 holdings, including the five mentioned earlier. None of that is to say this ETF will post double-digit gains during a recession, but it could prove more resilient than some investors think.
Adding to the case for the Vanguard S&P 500 Growth ETF as a long-term holding and one that could outperform over the next 20 years is its low annual expense ratio of 0.07%, or $7 on a $10,000 investment.
