Unlocking Superior Returns: Two Vanguard ETFs to Watch
Investing in the stock market can be a straightforward process, thanks to the rise of exchange-traded funds (ETFs) over the past three decades. These funds offer a simple way to diversify your portfolio across various sectors or focus on specific investment themes. However, it’s essential to be mindful of the costs associated with these funds, which can vary significantly.
The Cost-Conscious Investor’s Advantage
Vanguard ETFs stand out from the crowd, featuring expense ratios that are 83% lower than the average ETF. This means that investors can save a substantial amount of money on fees, allowing them to retain a larger portion of their returns.
Vanguard Small-Cap Value Index Fund: A Hidden Gem
The Vanguard Small-Cap Value Index Fund (NYSEMKT: VBR) is a growth-oriented ETF that focuses on mid-sized companies with a median market cap of $7.5 billion. These companies are considered undervalued based on the fund’s criteria, offering a promising opportunity for investors. With an incredibly low expense ratio of 0.07%, this fund has achieved an annualized return of 8.94% over the past 10 years.
A Diverse Array of Undervalued Growth Opportunities
The Vanguard Small-Cap Value Index Fund currently holds shares in 835 companies across all sectors of the global economy. Notable holdings include Smurfit WestRock plc, Builders FirstSource Inc., and Booz Allen Hamilton. As interest rates decline, the economic environment may become more conducive to smaller, growth-oriented companies, making this fund an attractive option for long-term investors.
Vanguard Growth Index Fund: A Leader in the Tech Sector
The Vanguard Growth Index Fund (NYSEMKT: VUG) targets mega-cap companies with a median market cap of $1.4 trillion that exhibit above-average growth potential. Designed to track the performance of the CRSP U.S. Large Cap Growth index, this fund features an attractive expense ratio of 0.04% and has delivered a remarkable 10-year annualized return of 15.1%. The fund’s largest holdings include tech stalwarts such as Apple, Microsoft, and Nvidia.
A Proven Track Record of Returns
The Vanguard Growth Index Fund has consistently outperformed the broader S&P 500 index, with total returns of 319% over the past 10 years. This fund’s emphasis on high-growth companies makes it an appealing option for risk-tolerant investors seeking outsized gains.
Two Compelling Opportunities for Growth-Minded Investors
Both the Vanguard Small-Cap Value Index Fund and the Vanguard Growth Index Fund offer compelling opportunities for investors looking to enhance their growth portfolios. These two ETFs not only feature low costs but also possess strong potential for significant long-term growth. Whether you’re looking to benefit from a favorable economic environment or tap into the growth potential of large-cap technology companies, these Vanguard ETFs are worth considering.
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