The S&P 500 gets most of the attention from the investment community, as it's the most widely followed market index. This gives investors a high-level view of how major U.S. stocks are performing.

But there are other options out there that can provide more nuanced exposure and the potential for better returns. The Vanguard Growth ETF (VUG 1.82%) is just one example.

A $10,000 investment in this exchange-traded fund a decade ago would be worth roughly $41,000 as of Feb. 2, 2024, a return that includes dividends. This meaningfully outpaces the 244% gain of the S&P 500.

It's all about growth

The Vanguard Growth ETF gives investors exposure to large-cap growth-oriented businesses. There are 208 different stocks in the portfolio, all of which generally post faster revenue and earnings gains than the companies that are excluded. The average company in the ETF has reported 20% annualized bottom-line growth in the last five years.

Technology and consumer discretionary stocks reign supreme, and combined make up 75% of the ETF's assets. Investors are undoubtedly familiar with some of the top holdings. The "Magnificent Seven" businesses together represent just under 28% of the ETF.

Apple is the top holding. Its shares have skyrocketed 937% in the last 10 years. Tesla is up 1,490% in the past decade, even though it's currently 54% below its peak price.

But none of these companies hold a candle to Nvidia. The artificial intelligence (AI)-focused hardware enterprise's shares have soared an incredible 17,000% since February 2014, certainly helping to propel the ETF's rise. Of course, huge sales gains have been a key ingredient of these returns. It's hard to find a better-performing stock than this.

Investors who want to benefit from above-average growth potential, with access to some of the most innovative businesses, should consider the Vanguard Growth ETF. While the risk and volatility might be higher, you have the chance to outperform the S&P 500 over the long haul.

A good time to buy

There are other reasons that this makes for a solid investment choice. The fees are extremely low, with an expense ratio of just 0.04%. This means you get to keep more of your returns over time, which is always a good thing. And it's worth pointing out that this ETF is provided by Vanguard, a reputable firm in the asset management industry with a history that spans almost 50 years. This can provide much-needed peace of mind for your hard-earned savings.

With this ETF near all-time highs, as well as the other major indexes in the same territory, it's clear that the market is currently characterized by rising optimism from investors. Investors seem to be overly enthused about the prospects of the Federal Reserve possibly cutting interest rates this year.

Your first thought might be that it's not a good time to invest when asset prices are at peak levels. But that's a flawed assumption. Those who have a long-term mentality, and by that I mean people who want to be invested for decades, are almost certain to make money in the market even if the starting prices seem high.

Even better, you can choose to dollar-cost average into this fund on a monthly or quarterly basis, which can help build a habit of saving and investing. This strategy can boost returns significantly.

With that being said, for those investors looking to add some more growth potential to their portfolios, the Vanguard Growth ETF is a smart choice.