The past four years have been one of the best stretches ever for the Vanguard Morningstar Growth ETF (VUG -3.00%). Since the beginning of 2023, the fund has returned just over 150%. Its heavy overweighting in technology stocks, currently 72% of the portfolio, and the tailwind from the artificial intelligence (AI) boom have combined to make a lot of money for shareholders.
The flip side is that if the stock market ever crashes, those factors that made it an outperformer could easily turn it into a deep underperformer.
But that’s the price of admission for investing in growth stocks. And it’s a big part of the reason why I’d buy and hold this fund for decades, even through a market crash. The potential for above-average long-term returns, despite the volatility, is worth owning.
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VUG targets an evolving growth-oriented economy
The Vanguard Morningstar…
