VUG is Vanguard's large-cap growth ETF: 147 stocks, a 0.03% expense ratio, and $223 billion in ETF assets as of June 30, 2026. It has beaten the S&P 500 by roughly 2.5 points a year over the past decade, but 63% of the fund now sits in ten stocks. It is a strong satellite holding, not a complete portfolio.
Key takeaways
- VUG tracks the large-cap growth index formerly known as the CRSP US Large Cap Growth Index. Morningstar acquired CRSP in early 2026, and in July 2026 the fund was renamed the Vanguard Morningstar Growth ETF. Same ticker, same 0.03% fee, same methodology.
- Ten stocks make up 63.1% of the fund and technology alone is 69.2% (June 30, 2026 fact sheet). This is a concentrated mega-cap tech bet wearing an index fund costume.
- Ten-year return through June 30, 2026: 18.0% annualized versus 15.5% for VOO. Five-year: 13.2% versus 13.4%. The long-run edge is real, but it has flattened recently, and VUG fell 33.1% in calendar 2022 versus 18.2% for VOO.
- At 0.03%, VUG costs one sixth of QQQ (0.18%) for similar mega-cap growth exposure, though the two track different indexes and QQQ has the stronger 10-year record.
- Quarterly dividends yield around 0.4%, which makes VUG unusually tax-efficient for a taxable account.
What VUG actually owns
VUG launched in January 2004 and holds the growth half of the US large-cap universe: companies screened on expected earnings growth, historical growth, return on assets, and related factors. The result is 147 stocks, but the weighting tells the real story. Per the June 30, 2026 fact sheet, the top ten are:
| Holding | Weight |
|---|---|
| Nvidia | 12.6% |
| Apple | 11.7% |
| Alphabet | 10.3% |
| Microsoft | 7.6% |
| Amazon | 4.5% |
| Broadcom | 4.3% |
| Meta Platforms | 3.4% |
| Tesla | 3.3% |
| Eli Lilly | 2.8% |
| AMD | 2.6% |
That is 63.1% of the fund in ten names, with technology at 69.2%, consumer discretionary at 13.9%, and industrials at 7.6%. Everything else is a rounding error. The portfolio's price-to-earnings ratio stood at 35.6x, against 27.5x for the S&P 500. You are paying up for growth, and the fund's fate is welded to the AI trade.
Performance: the record through mid-2026
Annualized total returns through June 30, 2026, from Vanguard's fact sheets (NAV):
| Period | VUG | VOO (S&P 500) |
|---|---|---|
| 1 year | 18.6% | 22.3% |
| 3 years | 22.9% | 20.6% |
| 5 years | 13.2% | 13.4% |
| 10 years | 18.0% | 15.5% |
| Since inception (2004) | 12.1% | n/a |
Using calendar-year windows through December 31, 2025 (computed from dividend-adjusted closing prices), VUG compounded at 14.6% a year over five years and 17.4% over ten, versus 14.4% and 14.8% for VOO and 15.0% and 19.4% for QQQ.
Two honest observations. First, the 10-year gap over the S&P 500 is large and mostly attributable to the same handful of mega-caps that now dominate the fund. Second, the 5-year numbers show VUG roughly tied with plain VOO. The entire recent payoff for holding a growth tilt came from surviving 2022, when VUG lost 33.1% while VOO lost 18.2%. If you would have capitulated in that drawdown, the tilt earned you nothing.
VUG vs VOO vs QQQ vs MGK
| VUG | VOO | QQQ | MGK | |
|---|---|---|---|---|
| Expense ratio | 0.03% | 0.03% | 0.18% | 0.05% |
| Index | Morningstar (ex-CRSP) US Large Cap Growth | S&P 500 | Nasdaq-100 | Morningstar (ex-CRSP) US Mega Cap Growth |
| Holdings | 147 | 506 | ~100 | 56 |
| Top 10 weight | 63.1% | 37.9% | ~50% | 66.8% |
| 10-yr return (to 6/30/26) | 18.0% | 15.5% | ~19.4%* | 19.0% |
| Best for | Low-cost broad growth tilt | Core holding | Maximum growth momentum, options liquidity | Deliberate mega-cap concentration |
*QQQ figure is the 10-year CAGR through December 31, 2025, computed from adjusted prices; the others are Vanguard fact sheet figures through June 30, 2026.
The nuances that matter:
- VOO is the core, not the competitor. With tech at 38% and a 37.9% top-ten weight, the S&P 500 already gives you plenty of growth exposure. VUG is what you add when you want more. Our S&P 500 vs Nasdaq-100 comparison covers how far that logic stretches over multi-decade horizons.
- QQQ has the best long-run record of the four, but you pay 0.18% for an index selected by exchange listing rather than growth fundamentals. Invesco cut the fee from 0.20% when QQQ converted to an open-end fund in December 2025. If you want Nasdaq-style exposure at Vanguard prices, we compared the options in Vanguard's closest QQQ equivalents, where MGK usually emerges as the answer.
- MGK is VUG with the bottom 90 stocks removed: 56 holdings, 66.8% in the top ten, 0.05% fee (cut from 0.07%). Its 10-year return of 19.0% annualized beat VUG's 18.0% because concentration helped in this particular decade. It also cuts both ways.
Costs and tax efficiency
At 0.03%, a $1 million position in VUG costs $300 a year. The Lipper average for large-cap growth funds is 0.94%, which on the same balance is $9,400. That difference alone compounds to serious money over a FIRE timeline.
VUG is also one of the better funds you can hold in a taxable account. The trailing yield is roughly 0.4% (about $2.01 per share distributed during 2025, before the fund's 6-for-1 share split in April 2026), so nearly all of your return arrives as unrealized capital gains you control the timing of. The ETF structure's in-kind redemption mechanism has kept capital gains distributions off shareholders' tax bills. If you are choosing between the ETF and Vanguard's mutual fund share classes for a taxable account, our Admiral shares vs ETF breakdown covers the mechanics; the short version is that for a growth index position the ETF wins on portability and price.
The concentration and valuation caveat
Treat this as the load-bearing section. VUG's top-ten weight has climbed to 63.1%, its P/E is 35.6x, and its three-year standard deviation is 17.4% versus 13.1% for VOO. History offers a clean stress test: in calendar 2022, rising rates alone, with no recession and no earnings collapse, took the fund down 33.1%. A genuine unwind of AI capex enthusiasm would likely be worse, because the fund's five largest positions are all priced partly on that story.
None of this makes VUG a bad fund. It makes it a levered-feeling bet on a specific market regime continuing. Size the position so that a one-third drawdown changes nothing about your withdrawal plan or your sleep.
Who VUG fits
A good fit if you are in the accumulation phase with a decade-plus horizon, want a low-cost growth tilt on top of a diversified core, hold it in a taxable account where the 0.4% yield keeps the tax drag near zero, and have demonstrated (not just assumed) that you can hold through a 30%+ drawdown.
A poor fit if you are within a few years of drawing down the portfolio, already hold concentrated tech exposure through RSUs or QQQ or single stocks, or want the fund to be your only US equity position. Pairing VUG with a total-market or value fund keeps the growth bet a bet rather than the whole thesis.
For how VUG slots into the rest of the lineup, including the value-side mirror VTV and the mega-cap variants, see our full Vanguard hub.
Bottom line
VUG delivers exactly what it promises: the growth half of the US large-cap market at a 0.03% fee, with excellent tax efficiency and a 10-year record 2.5 points ahead of the S&P 500. Just be clear-eyed that the promise has changed shape. This is now a 147-stock wrapper around ten mega-caps priced at 35.6x earnings. Buy it as a sized, deliberate tilt and it earns its place. Buy it as a diversified index fund and you have misread the label.
Data as of June 30, 2026 (Vanguard fact sheets) and December 31, 2025 (calendar-year return calculations) unless noted. Past performance does not guarantee future results.
Frequently asked questions
How concentrated is Vanguard's VUG ETF?
VUG is highly concentrated: ten stocks make up 63.1% of the fund and technology alone is 69.2%, per the June 30, 2026 fact sheet. Nvidia, Apple, and Alphabet together carry the largest weights. Although the fund holds 147 stocks, it functions as a concentrated mega-cap tech bet, and its fate is welded to the AI trade rather than a broadly diversified index.
Has VUG beaten the S&P 500?
Yes, VUG returned 18.0% annualized over the ten years through June 30, 2026 versus 15.5% for VOO, an edge of about 2.5 points a year. But over five years it roughly tied VOO at 13.2% versus 13.4%. The entire recent payoff came from surviving 2022, when VUG lost 33.1% while VOO lost 18.2%, so an investor who capitulated in that drawdown earned nothing from the growth tilt.
Is VUG cheaper than QQQ?
Yes, at a 0.03% expense ratio VUG costs one sixth of QQQ's 0.18% for similar mega-cap growth exposure. The two track different indexes, VUG follows the Morningstar (formerly CRSP) US Large Cap Growth Index while QQQ follows the Nasdaq-100, and QQQ has the stronger 10-year record. VUG's fee on a $1 million position is $300 a year against a 0.94% Lipper category average that would cost $9,400.
Is VUG good for a taxable account?
Yes, VUG is one of the more tax-efficient funds for a taxable account. Its trailing yield is roughly 0.4%, so nearly all of your return arrives as unrealized capital gains whose timing you control. The ETF structure's in-kind redemption mechanism has kept capital gains distributions off shareholders' tax bills, which keeps the tax drag near zero.
Who should not buy VUG?
VUG is a poor fit if you are within a few years of drawing down the portfolio, already hold concentrated tech exposure through RSUs, QQQ, or single stocks, or want it to be your only US equity position. Its top-ten weight is 63.1%, its P/E is 35.6x, and in 2022 rising rates alone took it down 33.1%. Pairing it with a total-market or value fund keeps the growth bet a bet rather than the whole thesis.