Many investors don't like the Nasdaq 100 index because it is too concentrated.
"Only a hundred companies, and only technology? Not for us."
Others don't like the S&P 500 index because it is too diversified and many companies in it do not provide adequate returns.
So here's the ETF that claims to "filter" the S&P 500 and give you both sector diversification and - excess returns?!
Meet VOOG – the "carefully selected" from the S&P 500!
What exactly is VOOG?
The VOOG ETF - (Vanguard S&P 500 Growth ETF) is an ETF that contains only growth stocks from the S&P 500 index.
The meaning? - No more mediocre utility companies or slow real estate firms – but only the giants growing at a dizzying pace!
Those that lead the market forward:
Technology, consumer discretionary, innovative healthcare, and more.
Instead of getting the entire S&P 500, with many dozens of mediocre companies that weigh down performance – you get only the elite. Only those that have proven they know how to grow.
It's like choosing only the red and shiny apples from the basket at the supermarket – because you pay the same, so why compromise?
And regarding diversification, the ETF holds, as of the last update, about 235 different stocks!
And despite being technology-heavy (how could it not be - we said growth, right? 🥸) it also holds breakthrough pharmaceutical manufacturers, sophisticated consumer companies, innovative financial entities – so you're not just buying the next generation of chips - but also those who know how to sell them to the world.
Management fees?
0.10% - we've seen higher.
Leading holdings in the VOOG index – key companies (as of the last quarter):
Apple (AAPL)
Microsoft (MSFT)
NVIDIA (NVDA)
Amazon (AMZN)
Alphabet (GOOGL)
Meta (META)
Visa (V)
UnitedHealth (UNH)
Eli Lilly (LLY)
Broadcom (AVGO)
As can be seen, the emphasis is on the giants that dictate the growth rate of the American - and global - market.
Historical performance examples (as of end of 2024):
Average annual return for 5 years: approximately 14%
Cumulative return over 10 years: over 270%
Outperformance over S&P 500 in the last 5 years: approximately 2.1% per year
Of course - past returns do not guarantee future returns, but they certainly tell an interesting story - we are monitoring.