VUG Stock Recent News

If you're looking for a simple way to generate wealth in the stock market with little effort, you can't go wrong with an exchange-traded fund (ETF).

Large-cap U.S. growth stocks and VUG ETF illustrated robust performance in 2024, but a changing yield curve and altered financial market conditions warrant a reassessment of the ETF's prospects. Our previous support for VUG was based on anticipated lower short-term rates, a steepening yield curve, and strong portfolio-based fundamentals, which largely materialized. Data implies that current economic growth is robust, contributing to rising yields; however, moderating growth is expected in 2025 alongside higher interest rates.

VUG invests in large-cap growth stocks, with an expense ratio of 0.04% and a competitive Sharpe ratio compared to its peers. VUG's composition is similar to the Nasdaq 100, with a high exposure to technology. In my opinion, there are more efficient solutions in the market that track this benchmark. It has a P/E ratio of 40x, higher than the average, reflecting a very high expected EPS growth rate, which could decline with the new monetary policy forecasts.

If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Vanguard Growth ETF (VUG), a passively managed exchange traded fund launched on 01/26/2004.

SCHG: A Top Pick For Large-Cap Growth Investors With One Key Concern

The Vanguard Growth Index Fund ETF is rated a buy due to its strong performance, high profitability, and significant exposure to the Mag 7 tech giants. VUG has outpaced the S&P 500 by over 11% in the last year, with the Mag 7 making up 50% of its portfolio. The Mag 7 companies exhibit superior fundamentals, including high ROE, strong cash flows, and involvement in high-growth areas like AI and cloud computing.

The S&P 500 is coming off back-to-back annual gains of more than 25% in 2023 and 2024 (including dividends), something it has only done one other time in its history dating back to 1957. In other words, the bull market is roaring.

If you're investing a large sum of money in the stock market, it can be a bit of a challenge finding the right type of investment. Although you want to earn a good return to make the most of that money, you also want to be careful not to take on a lot of risk and incur a huge loss, either.

As 2024 winds down, growth stocks have once again easily outperformed value stocks. If it seems like growth stocks usually outperform value stocks, you'd be correct when looking back over the past 10 years.

Here's a look at the big trades ETF investors missed out on in the past year and what that might mean for 2025.