The S&P 500 is a highly diversified U.S. stock market index that gives investors exposure to everything from technology companies to banks.
The S&P 500 Growth Index invests in the best-performing growth stocks from the regular S&P 500 and ignores the rest.
The Vanguard S&P 500 Growth ETF tracks the performance of the growth index and has delivered impressive returns over the past decade.
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Benchmark S&P 500(SNPINDEX: ^GSPC) hosts 500 companies from 11 different economic sectors, making it very diverse. It gives investors exposure to high-growth technology stocks leading the artificial intelligence (AI) revolution, while balancing them with the biggest banks, retailers, energy companies and more.
But then there is S&P 500 growthArrowwhich exclusively owns approximately 216 of the top growth stocks from the regular S&P 500 and excludes the rest. As a result, it consistently produces much higher returns.
The Vanguard S&P 500 Growth ETF(NYSEMKT: VOOG) is an exchange-traded fund (ETF) that tracks the performance of the S&P 500 Growth Index. If you had put $10,000 in it 10 years ago, here’s how much you’d be sitting on today.
Image source: Getty Images.
The S&P 500 Growth Index selects stocks based on factors such as their momentum and the sales growth of their underlying companies. So with so many tech companies checking those boxes right now, it’s no surprise that the information technology sector has a whopping 42.6% weighting here, compared to just 34.8% for the S&P 500.
Each of the world’s three largest companies is in the information technology sector: Nvidia, Microsoftand Apple. Their combined value is $11.9 trillion.
The Vanguard S&P 500 Growth ETF’s top 10 holdings include several technology and related stocks, including Nvidia, Microsoft and Apple. The table shows their weights in the Vanguard ETF compared to their weights in the S&P 500.
Stock
Vanguard ETF Weighting
S&P 500 Weight
1. Nvidia
14.58%
7.95%
2. Alphabet
8.17%
4.46%
3. Microsoft
6.41%
6.73%
4. An apple
5.57%
6.60%
5. Meta platforms
5.10%
2.78%
6. Broadcom
4.97%
2.71%
7. Tesla
4.00%
2.18%
8. Amazon
3.96%
3.72%
9. Eli Lilly
1.94%
1.06%
10. visa
1.86%
0.99%
Data source: Vanguard. Portfolio weights are accurate to 2025. September 30 and may change.
These 10 stocks have averaged an 870% return over the past decade, eclipsing the S&P 500’s 235% gain. The S&P 500 Growth Index assigns much more weight to most of them than the S&P 500, which is the source of its advantage.
NVDA data by YCharts
Vanguard S&P 500 Growth ETF since its inception in 2010 yielded an annualized return of 16.8%, crushing the S&P 500, which rose 13.8% annually over the same period.
But the Vanguard ETF has posted an annualized return of 17.5% over the past 10 years, thanks in part to huge contributions from stocks like Nvidia, Tesla and Broadcom, which are leaders in areas such as semiconductors, artificial intelligence, electric vehicles and autonomous driving.
If you had invested $10,000 in a Vanguard ETF a decade ago, it would be worth $50,100 today, representing a total return of 400%.
It is unrealistic to expect any ETF to grow at this rate forever, as even the best companies face headwinds over time. Take Nvidia, for example, with its H100 data center chip in 2023. was the world’s best in artificial intelligence, earning a staggering 98% market share. The company continues to grow rapidly, but competitors such as Broadcom and Advanced Micro Devices nipping at her heels. As a result, Nvidia’s fastest rate of revenue growth is almost certainly in the rearview mirror.
Another example is meta platforms. About 3.5 billion people use one of its social media apps like Facebook, Instagram and WhatsApp every day, which is almost half of the world’s population. Therefore, it will become increasingly difficult to find new registrars unless the population increases significantly.
All that said, the Vanguard ETF could deliver above-average returns for at least the next few years thanks to powerful themes like AI, which is projected to continue creating trillions of dollars in value. There is no guarantee that the ETF will grow another 400% the other decade, but it could certainly be a great buy for investors looking to beat the S&P 500.
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Anthony Di Pizio has no positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Tesla and Visa. The Motley Fool recommends Broadcom and recommends the following options: Long 2026 January $395 calls on Microsoft and short 2026 January $405 calls to Microsoft. The Motley Fool has a disclosure policy.
If you had invested $10,000 in the Vanguard S&P 500 Growth ETF 10 years ago, how much would you have today, originally published by The Motley Fool