The Smartest Growth ETF to Buy With $1,000 Right Now. (Hint: It Has Averaged Annual Gains of 18.6% Over the Past 10 Years.)
Key Points
The ETF has an impressive track record.
It charges a paltry annual fee.
It encompasses all of the "Magnificent Seven" stocks, too.
- 10 stocks we like better than Vanguard Growth ETF ›
If you're like me, you would love a portfolio chock-full of terrific growth stocks. But achieving that is easier said than done, because you'll need some time and skill to study the universe of stocks, deciding which ones have the most promise and when you should buy -- and/or sell -- them.
Thus, it can be smart to stick with one or two great growth exchange-traded funds (ETFs). (An ETF is a fund that trades like a stock, making it easy to get in and out of.) Here's a look at one of my favorites -- the Vanguard Growth ETF (NYSEMKT: VUG)
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The table below shows how it has performed, and offers comparative numbers for the Vanguard S&P 500 ETF (NYSEMKT: VOO):
|
Time Period |
Vanguard Growth ETF |
Vanguard S&P 500 ETF |
|---|---|---|
|
Past 5 years |
12.81% |
13.82% |
|
Past 10 years |
18.55% |
16.09% |
|
Past 15 years |
15.40% |
13.77% |
Data source: Morningstar as of Feb. 9, 2026.
Why you might invest in the Vanguard Growth ETF
Here are some reasons I love this ETF:
- It sports a solid performance record.
- Its expense ratio (annual fee) is just 0.04%, so you'll fork over only $0.40 annually for each $1,000 you have invested in the fund.
- It's full of large, established companies, including the "Magnificent Seven."
Here are the ETF's recent top 10 holdings:
|
Stock |
Percent of ETF |
|---|---|
|
Nvidia |
12.73% |
|
Apple |
11.88% |
|
Microsoft |
10.63% |
|
Alphabet Class A |
5.39% |
|
Amazon |
4.58% |
|
Alphabet Class C |
4.27% |
|
Meta Platforms |
4.26% |
|
Broadcom |
4.04% |
|
Tesla |
3.77% |
|
Eli Lilly |
2.72% |
Data source: Morningstar as of Dec. 31, 2025.
Why you might not invest in the Vanguard Growth ETF
Of course, the ETF is not for everyone, and you might think twice if:
- You're worried about an imminent market meltdown -- because during such pullbacks, growth stocks often fall harder than their counterparts.
- You don't love very concentrated funds. This ETF recently held about 64% of its assets in just its top 10 holdings. (It recently held 151 different stocks.) Indeed, about 35% of its assets were in just its top three holdings! This is a plus, of course, if you're exceptionally bullish on the future of companies such as Nvidia, Apple, and Microsoft.
- You'd like some dividend income. This ETF's recent yield was just 0.42%, even less than the S&P 500's recent 1.1%.
So take a closer look, weigh the fund's pros and cons, and see what you think. Remember that there are plenty of other promising ETFs out there, too.
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Selena Maranjian has positions in Alphabet, Amazon, Apple, Broadcom, Meta Platforms, Microsoft, Nvidia, and Vanguard Growth ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Tesla, Vanguard Growth ETF, and Vanguard S&P 500 ETF. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
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