ETFs
These 4 Vanguard ETFs Soared More Than 20% in the First Half of 2024. Here’s Which One Is Most Likely to Fly Even Higher.
These Vanguard ETFs have a lot in common.
You don’t need to pick individual stocks to get good returns. Exchange-traded funds (ETFs) let you invest in a basket of stocks at once. And Vanguard ETFs, in particular, have low costs that don’t eat into your profits much.
Four Vanguard ETFs are up more than 20% in the first half of 2024. And one of them may have a good chance of soaring even higher.
Four top-flight Vanguard ETFs
The best performing Vanguard ETF so far this year is the Vanguard S&P 500 Growth Index Fund (VOOG 0.05%). This fund focuses on large caps growth values in the S&P 500 The Vanguard S&P 500 Growth Index Fund is up nearly 24% year-to-date. That level of performance is not unusual. Since its inception in September 2010, the Vanguard S&P 500 Growth Index Fund has generated an average annual return of 16.17%.
THE Vanguard Mega Cap Growth Index Fund (MGK 0.01%) is not far behind with a gain of 22% year-to-date. This ETF holds 79 of the largest U.S. growth stocks. The average market cap of these stocks is $1.8 trillion.
Two other Vanguard funds are neck and neck. Vanguard Russell 1000 Growth Index Fund FNB (VONG 0.08%) and the Vanguard Growth Index Fund (VUG 0.02%) are up about 21% this year.
The Vanguard Russell 1000 Growth Index Fund ETF tracks the Russell 1000 Growth Index. This ETF holds positions in 440 stocks. The Vanguard Growth Index Fund ETF tracks the CRSP US Large Cap Growth Index and holds 199 stocks.
Common denominators
These four Vanguard ETFs share several common denominators (other than the fact that they’re all operated by Vanguard and have generated significant gains in 2024). You may have noticed the word “growth” in the name of all the funds. That’s no coincidence. Growth stocks have performed exceptionally well this year. So it makes sense that Vanguard ETFs that primarily hold growth stocks are also up significantly.
The specific growth stocks that these funds own are also quite similar. Microsoft, Apple, Nvidia, AmazonAnd Meta-platforms rank among the top five holdings of the top five performing Vanguard ETFs.
Although the fifth to tenth largest positions in these ETFs are not exactly the same, they include many of the same stocks. Alphabet, Eli LillyAnd You’re here are in the top 10 of these four booming Vanguard ETFs.
Unsurprisingly, all of these ETFs also have low costs. The annual return of the Vanguard S&P 500 Growth ETF expense ratio The Vanguard Russell 1000 Growth ETF has an annual expense ratio of 0.10%. It is closely followed by the Vanguard Mega Cap Growth ETF, which has an annual expense ratio of 0.07%. The cheapest of the bunch, however, is the Vanguard Growth ETF, which has an annual expense ratio of just 0.04%.
Which Vanguard ETF is most likely to soar even higher?
I believe these four Vanguard ETFs could continue to perform well through the end of 2024. It’s hard to choose which one is most likely to soar even higher due to the similarity of their top holdings. However, if I had to pick just one, it would be the Vanguard Russell 1000 Growth ETF.
The main reason for choosing this Vanguard ETF is the possibility of lower interest rates later this year. Stocks of companies with smaller market caps tend to react more to rate cuts than those with larger market caps. The stocks in the Vanguard Russell 1000 Growth ETF portfolio have the smallest average market caps of these four top-performing companies.
This ETF also holds by far the most stocks in the group. While it would benefit from the mega-cap leaders of the first half of the year continuing to perform well, it also has a better chance of doing well with many other relatively smaller stocks (although they are all still large-cap stocks).
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Amazon’s Whole Foods Market, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Keith Speights has positions in Alphabet, Amazon, Apple, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Tesla, and Vanguard Index Funds-Vanguard Growth ETF. The Motley Fool recommends the following options: long January 2026 $395 call on Microsoft and short January 2026 $405 call on Microsoft. The Motley Fool has a position in Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Tesla, and Vanguard Index Funds-Vanguard Growth ETF. The Motley Fool recommends the following options: long January 2026 $395 call on Microsoft and short January 2026 $405 call on Microsoft. disclosure policy.