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Should Vanguard Russell 1000 Growth ETF (VONG) Be on Your Investing Radar?
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If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Vanguard Russell 1000 Growth ETF (VONG - Free Report) , a passively managed exchange traded fund launched on 09/22/2010.
The fund is sponsored by Vanguard. It has amassed assets over $8.32 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. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.88%.
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 43.40% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc. (AAPL - Free Report) accounts for about 12.57% of total assets, followed by Microsoft Corp. (MSFT - Free Report) and Amazon.com Inc. (AMZN - Free Report) .
The top 10 holdings account for about 46.85% of total assets under management.
Performance and Risk
VONG seeks to match the performance of the Russell 1000 Growth Index before fees and expenses. The Russell 1000 Growth Index measures the performance of large-capitalization growth stocks in the United States.
The ETF has lost about -25.39% so far this year and is down about -23.30% in the last one year (as of 11/14/2022). In the past 52-week period, it has traded between $53.17 and $79.55.
The ETF has a beta of 1.07 and standard deviation of 27.94% for the trailing three-year period, making it a medium risk choice in the space. With about 518 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Russell 1000 Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VONG is a good option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $71.11 billion in assets, Invesco QQQ has $156.88 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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Should Vanguard Russell 1000 Growth ETF (VONG) Be on Your Investing Radar?
If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Vanguard Russell 1000 Growth ETF (VONG - Free Report) , a passively managed exchange traded fund launched on 09/22/2010.
The fund is sponsored by Vanguard. It has amassed assets over $8.32 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. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.88%.
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 43.40% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc. (AAPL - Free Report) accounts for about 12.57% of total assets, followed by Microsoft Corp. (MSFT - Free Report) and Amazon.com Inc. (AMZN - Free Report) .
The top 10 holdings account for about 46.85% of total assets under management.
Performance and Risk
VONG seeks to match the performance of the Russell 1000 Growth Index before fees and expenses. The Russell 1000 Growth Index measures the performance of large-capitalization growth stocks in the United States.
The ETF has lost about -25.39% so far this year and is down about -23.30% in the last one year (as of 11/14/2022). In the past 52-week period, it has traded between $53.17 and $79.55.
The ETF has a beta of 1.07 and standard deviation of 27.94% for the trailing three-year period, making it a medium risk choice in the space. With about 518 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Russell 1000 Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VONG is a good option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $71.11 billion in assets, Invesco QQQ has $156.88 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.