Investors seeking exposure to growth in the markets will like the Vanguard Growth ETF (VUG), which will help cut the guesswork of which companies to pick.
"Growth stocks show a different return pattern than value stocks, as the growth index had a correlation to its value index cousin of 0.91 over the past decade. That may sound high, but it is lower than the correlation between the comparable style indexes from S&P and Russell," Michael Rawson wrote in a Morningstar analysis.
VUG does give investors exposure to higher growth, along with the more expensive half of the U.S. large-cap market. The fund is dedicated to mega-caps, or "titans," that exhibit slow, steady growth, rather than the typical supercharge that is associated with this area of the market. Large stakes are usually found in technology and health-care rather than the financial or utility sectors, reports Rawson.
Over the last 3-5 years, VUG has beaten the S&P 500 on average and the super low 0.12% expense ratio keeps it attractive, reports Selena Maranjian for The Motley Fool.
Some of the companies in VUG make this ETF worth another look. For example, Apple (AAPL) ,which has risen 77% and is the most valuable company on the stock market today. Philip Morris International (PM) has gained 40% and is poised to grow with emerging economies.
Vanguard Growth ETF
Disclosure: I am long AAPL. Tom's clients own AAPL.