Exchange-traded funds (ETFs) have grown in popularity over the past decade or two, and for good reason. Just like mutual funds, they let you invest in a range of stocks (or other things) with one simple investment -- and they often sport lower expense ratios (annual fees), too. ETFs also make investing easy by trading like stocks throughout the day in the stock market.
One particularly popular ETF is the Vanguard Value ETF (VTV 0.47%). I do like it myself, but I'm a bit more jazzed by the Vanguard Growth ETF (VUG 1.05%). Here's a look at both. See which one(s) you like.
Image source: Getty Images.
First, let's tackle performance. You can see how each has fared in the table below, and I'll include an also-excellent S&P 500 index fund, the Vanguard S&P 500 ETF (NYSEMKT: VOO), for comparison:
|
ETF |
5-Year Avg. Annual Return |
10-Year Avg. Annual Return |
15-Year Avg. Annual Return |
|---|---|---|---|
|
Vanguard Value ETF |
15.11% |
10.60% |
12.31% |
|
Vanguard Growth ETF |
16.77% |
16.08% |
16.77% |
|
Vanguard S&P 500 ETF |
16.35% |
13.54% |
N/A |
Sources: Morningstar.com, as of July 7, 2025. ETF = exchange-traded fund.
What's so great about the Vanguard Value ETF?
Before you write off the Vanguard Value ETF because of its slower growth, keep reading. The ETF is offering a different proposition than the other ETFs. It's focused on value -- meaning it's not chasing high-flying stocks and buying them at sometimes inflated prices. Instead, it's focused on seemingly undervalued stocks, ones that offer a margin of safety.
For anyone skittish about stocks in general, or just today, given that our economy is facing tariff complications, among other things, this ETF should provide some relief. If the market suddenly heads south (as it has always done every few years), value stocks will often drop less severely than their more richly valued counterparts. Here are some more things to know about the ETF:
- Its expense ratio is 0.04%, meaning it will charge you $4 per year for every $10,000 you have invested in the fund.
- It tracks the CRSP US Large Cap Value Index, which focuses on the less expensive stocks in the broad U.S. market.
- Its holdings are likely to sport relatively low valuations, more modest growth prospects, and significant dividend yields. (Its overall dividend yield was recently 2.2%.)
- It recently included 331 stocks, with an average price-to-earnings (P/E) ratio of 16.7.
- Its top 10 holdings made up 21% of its total assets (as of May 31), and here they are:
|
Company |
Weight in Index |
|---|---|
|
Berkshire Hathaway |
3.59% |
|
JPMorgan Chase |
3.40% |
|
ExxonMobil |
2.07% |
|
Walmart |
2.03% |
|
Procter & Gamble |
1.86% |
|
Johnson & Johnson |
1.74% |
|
The Home Depot |
1.71% |
|
AbbVie |
1.53% |
|
Bank of America |
1.34% |
|
Philip Morris International |
1.31% |
Source: Morningstar.com, as of May 31, 2025.
What's so great about the Vanguard Growth ETF?
The Vanguard Growth ETF has an admirable track record, topping the other two ETFs above. Thus, many people, myself included, will be drawn to it, imagining our own portfolios growing at above-average rates. Still, it's important to remember that the stock market is volatile, and not every year will feature double-digit gains for this (or other) ETFs.
Indeed, in market downturns, growth stocks can have further to fall. Check out how the ETFs fared in 2022 and 2023:
|
ETF |
2022 Return |
2023 Return |
|---|---|---|
|
Vanguard Value ETF |
(2.07%) |
9.32% |
|
Vanguard S&P 500 ETF |
(18.19%) |
26.32% |
|
Vanguard Growth ETF |
(33.15%) |
46.83% |
Sources: Morningstar.com, as of July 7, 2025. ETF = exchange-traded fund.
There's a clear risk-and-reward trade-off there, right? That's why you might want to spread your dollars across several different kinds of ETFs to diversify by risk and return. Here are some more things to know about the Vanguard Growth ETF:
- Its expense ratio is also 0.04%.
- It tracks the CRSP US Large Cap Growth Index, which focuses on faster-growing stocks in the broad U.S. market.
- Its overall dividend yield was recently 0.45%. That's not surprising, as growth stocks tend to reinvest most of their excess earnings to further their growth. They're generally not generous dividend payers.
- It recently included 166 stocks, with an average P/E ratio of 31.2 -- roughly twice that of the value-oriented ETF.
- Its top 10 holdings made up a whopping 58% of its total assets (as of May 31), and here they are:
|
Company |
Weight in Index |
|---|---|
|
Microsoft |
11.32% |
|
Nvidia |
10.30% |
|
Apple |
10.08% |
|
Amazon |
6.29% |
|
Meta Platforms |
4.37% |
|
Broadcom |
3.97% |
|
Tesla |
3.32% |
|
Alphabet Class A |
3.21% |
|
Alphabet Class C |
2.59% |
|
Eli Lilly |
2.21% |
Source: Morningstar.com, as of May 31, 2025.
Clearly, that's a different bunch of companies, including all the "Magnificent Seven" -- Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Facebook parent Meta Platforms, and Tesla. If you would like to be part-owner of those companies -- and more than 150 others -- without having to buy into lots of companies, you might want to park some of your dollars in this ETF.
So, really, both of these are solid, low-fee ETFs with a lot going for them. Think about which might serve you best.
