Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Vanguard Growth ETF (VUG Quick QuoteVUG - Free Report) is a passively managed exchange traded fund launched on January 26, 2004.

The fund is sponsored by Vanguard. It has amassed assets over $203.36 billion, making it the largest ETF 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. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.04%, making it the least expensive products in the space.

It has a 12-month trailing dividend yield of 0.41%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 50.9% of the portfolio. Telecom and Consumer Discretionary round out the top three.

Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 12.72% of total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).

The top 10 holdings account for about 57.72% of total assets under management.

Performance and Risk

VUG seeks to match the performance of the CRSP U.S. Large Cap Growth Index before fees and expenses. The CRSP US Large Cap Growth Index represents the growth companies of the CRSP US Large Cap Index.

The ETF has lost about 0.22% so far this year and is up about 15.28% in the last one year (as of 01/27/2026). In the past 52-week period, it has traded between $329.49 and $504.26.

The ETF has a beta of 1.19 and standard deviation of 19.12% for the trailing three-year period, making it a medium risk choice in the space. With about 154 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard Growth ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VUG is a great option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.

The iShares Russell 1000 Growth ETF (IWF) and the Invesco QQQ (QQQ) track a similar index. While iShares Russell 1000 Growth ETF has $121.96 billion in assets, Invesco QQQ has $410.90 billion. IWF has an expense ratio of 0.18% and QQQ charges 0.2%.

Bottom-Line

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.