VOO vs. VUG: What’s The Difference?

The Vanguard S&P 500 ETF (VOO) and the Vanguard Growth Index Fund ETF Shares (VUG) are both among the Top 100 ETFs. VOO is a Vanguard Large Blend fund and VUG is a Vanguard Large Growth fund. So, what’s the difference between VOO and VUG? And which fund is better?

The expense ratio of VOO is 0.01 percentage points lower than VUG’s (0.03% vs. 0.04%). VOO also has a lower exposure to the technology sector and a lower standard deviation. Overall, VOO has provided lower returns than VUG over the past ten years.

In this article, we’ll compare VOO vs. VUG. We’ll look at performance and risk metrics, as well as at their portfolio growth and holdings. Moreover, I’ll also discuss VOO’s and VUG’s annual returns, industry exposure, and fund composition and examine how these affect their overall returns.

Summary

VOO VUG
Name Vanguard S&P 500 ETF Vanguard Growth Index Fund ETF Shares
Category Large Blend Large Growth
Issuer Vanguard Vanguard
AUM 753.41B 165.53B
Avg. Return 14.45% 17.58%
Div. Yield 1.34% 0.57%
Expense Ratio 0.03% 0.04%

The Vanguard S&P 500 ETF (VOO) is a Large Blend fund that is issued by Vanguard. It currently has 753.41B total assets under management and has yielded an average annual return of 14.45% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.03%.

The Vanguard Growth Index Fund ETF Shares (VUG) is a Large Growth fund that is issued by Vanguard. It currently has 165.53B total assets under management and has yielded an average annual return of 17.58% over the past 10 years. The fund has a dividend yield of 0.57% with an expense ratio of 0.04%.

VOO’s dividend yield is 0.77% higher than that of VUG (1.34% vs. 0.57%). Also, VOO yielded on average 3.13% less per year over the past decade (14.45% vs. 17.58%). The expense ratio of VOO is 0.01 percentage points lower than VUG’s (0.03% vs. 0.04%).

Fund Composition

Industry Exposure

VOO vs. VUG - Industry Exposure

VOO VUG
Technology 24.24% 39.05%
Industrials 8.86% 5.13%
Energy 2.84% 0.32%
Communication Services 11.14% 16.49%
Utilities 2.43% 0.0%
Healthcare 13.1% 8.09%
Consumer Defensive 6.32% 2.41%
Real Estate 2.58% 2.46%
Financial Services 14.2% 6.75%
Consumer Cyclical 12.01% 17.78%
Basic Materials 2.27% 1.52%

The Vanguard S&P 500 ETF (VOO) has the most exposure to the Technology sector at 24.24%. This is followed by Financial Services and Healthcare at 14.2% and 13.1% respectively. Utilities (2.43%), Real Estate (2.58%), and Energy (2.84%) only make up 7.85% of the fund’s total assets.

VOO’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 6.32%, 8.86%, 11.14%, 12.01%, and 13.1%.

The Vanguard Growth Index Fund ETF Shares (VUG) has the most exposure to the Technology sector at 39.05%. This is followed by Consumer Cyclical and Communication Services at 17.78% and 16.49% respectively. Energy (0.32%), Basic Materials (1.52%), and Consumer Defensive (2.41%) only make up 4.25% of the fund’s total assets.

VUG’s mid-section with moderate exposure is comprised of Real Estate, Industrials, Financial Services, Healthcare, and Communication Services stocks at 2.46%, 5.13%, 6.75%, 8.09%, and 16.49%.

VOO is 14.81% less exposed to the Technology sector than VUG (24.24% vs 39.05%). VOO’s exposure to Financial Services and Healthcare stocks is 7.45% higher and 5.01% higher respectively (14.2% vs. 6.75% and 13.1% vs. 8.09%). In total, Utilities, Real Estate, and Energy also make up 5.07% more of the fund’s holdings compared to VUG (7.85% vs. 2.78%).

Holdings

VOO - Holdings

VOO Holdings Weight
Apple Inc 5.92%
Microsoft Corp 5.62%
Amazon.com Inc 4.06%
Facebook Inc Class A 2.29%
Alphabet Inc Class A 2.02%
Alphabet Inc Class C 1.97%
Tesla Inc 1.44%
Berkshire Hathaway Inc Class B 1.44%
NVIDIA Corp 1.37%
JPMorgan Chase & Co 1.3%

VOO’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.92%, 5.62%, 4.06%, 2.29%, and 2.02%.

Alphabet Inc Class C (1.97%), Tesla Inc (1.44%), and Berkshire Hathaway Inc Class B (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VOO’s holdings at 1.37% and 1.3%.

VUG - Holdings

VUG Holdings Weight
Apple Inc 10.13%
Microsoft Corp 9.52%
Amazon.com Inc 6.88%
Facebook Inc Class A 3.89%
Alphabet Inc Class A 3.43%
Alphabet Inc Class C 3.22%
Tesla Inc 2.44%
NVIDIA Corp 2.21%
Visa Inc Class A 1.78%
PayPal Holdings Inc 1.6%

VUG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.13%, 9.52%, 6.88%, 3.89%, and 3.43%.

Alphabet Inc Class C (3.22%), Tesla Inc (2.44%), and NVIDIA Corp (2.21%) have a slightly smaller but still significant weight. Visa Inc Class A and PayPal Holdings Inc are also represented in the VUG’s holdings at 1.78% and 1.6%.

Performance

Annual Returns

VOO vs. VUG - Annual Returns

Year VOO VUG
2020 18.35% 40.16%
2019 31.46% 37.26%
2018 -4.42% -3.32%
2017 21.78% 27.8%
2016 11.93% 6.13%
2015 1.35% 3.32%
2014 13.63% 13.62%
2013 32.33% 32.38%
2012 15.98% 17.03%
2011 2.09% 1.87%
2010 0.0% 17.11%

VOO had its best year in 2013 with an annual return of 32.33%. VOO’s worst year over the past decade yielded -4.42% and occurred in 2018. In most years the Vanguard S&P 500 ETF provided moderate returns such as in 2016, 2014, and 2012 where annual returns amounted to 11.93%, 13.63%, and 15.98% respectively.

The year 2020 was the strongest year for VUG, returning 40.16% on an annual basis. The poorest year for VUG in the last ten years was 2018, with a yield of -3.32%. Most years the Vanguard Growth Index Fund ETF Shares has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 13.62%, 17.03%, and 17.11% respectively.

Portfolio Growth

VOO vs. VUG - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VOO $10,000 $36,575 14.45%
VUG $10,000 $46,738 17.58%

A $10,000 investment in VOO would have resulted in a final balance of $36,575. This is a profit of $26,575 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.45%.

With a $10,000 investment in VUG, the end total would have been $46,738. This equates to a $36,738 profit over 10 years and a compound annual growth rate (CAGR) of 17.58%.

VOO’s CAGR is 3.13 percentage points lower than that of VUG and as a result, would have yielded $10,163 less on a $10,000 investment. Thus, VOO performed worse than VUG by 3.13% annually.


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