Here's Why The Vanguard S&P 500 Growth ETF Could Be Your Ticket to Beating the Market Over the Long Term

By Anthony Di Pizio – Mar 28, 2026 at 5:06AM ESTKey PointsThe S&P 500 is an index of 500 American stocks from 11 different sectors of the economy, so it's highly diversified. The S&P 500 Growth index invests in 139 of the best-performing growth stocks from the S&P 500 and disregards its other 361 stocks. The Vanguard S&P 500 Growth ETF tracks the performance of the Growth index, and it has beaten the market for the last 16 years. The S&P 500 (^GSPC 1.67%) is a highly diversified American stock market index featuring 500 companies from 11 different sectors of the economy, and it's coming off a strong year in 2025 with a return of 16.4%. However, had you invested in the S&P 500 Growth index instead, you would have earned an even higher return of 21.4% last year. The Growth index exclusively invests in 139 of the best-performing growth stocks from the regular S&P 500. Therefore, it holds large positions in powerhouses like Nvidia and Microsoft while maintaining very low exposure to defensive stocks that tend to grow more slowly. The Vanguard S&P 500 Growth ETF (VOOG 2.08%) is an exchange-traded fund (ETF) that tracks the performance of the Growth index by holding the same stocks and maintaining similar weightings. It was established in 2010, and it has beaten the S&P 500 every year since. Here's why its run of outperformance is likely to continue. Image source: Getty Images. A growth-focused portfolio The S&P 500 Growth index selects its holdings based on factors like their momentum and the sales growth of the underlying companies. It rebalances once per quarter by eliminating the stocks that no longer meet its criteria and replacing them with more suitable candidates. Information technology is the largest sector in the Vanguard S&P 500 Growth ETF by weight, representing a whopping 47% of the value of its portfolio. The companies in this sector operate at the cutting edge of industries like cloud computing and artificial intelligence (AI), so they tend to grow much faster than the rest of the market. In fact, information technology is home to more trillion-dollar giants than any other sector: Nvidia: $4.3 trillion. Apple: $3.7 trillion. Microsoft: $2.8 trillion.

Taiwan Semiconductor Manufacturing: $1.8 trillion. Broadcom: $1.5 trillion. Those companies are among the top holdings in the Vanguard S&P 500 Growth ETF, except for Taiwan Semiconductor Manufacturing, because it isn't American, so it doesn't qualify for inclusion in the S&P 500 Growth index or the S&P 500. For some perspective, the information technology sector represents just 32.4% of the regular S&P 500. Therefore, since Nvidia, Apple, Microsoft, and Broadcom have delivered a median return of 1,400% over the last decade, it makes sense that the Vanguard ETF -- which assigns them much higher weightings -- has outperformed. NVDA data by YCharts But many stocks also consistently underperform the S&P 500, including those in defensive sectors like financials, utilities, and real estate. The Vanguard ETF tends to invest less aggressively in those sectors, which is another reason it regularly beats the index: Sector Vanguard ETF Weighting S&P 500 Weighting Financials 9.7% 12.5% Real estate 0.6% 2% Utilities 0.5% 2.5% Data source: Vanguard. Sector weightings are accurate as of Feb. 28, 2026, and are subject to change. The Vanguard ETF has beaten the market for 16 years The Vanguard S&P 500 Growth ETF has delivered a compound annual return of 16.3% since its inception in September 2010, handily beating the S&P 500, which returned an average of 14% per year over the same period. While the 2.3-percentage-point difference in annual returns might not sound like much, it made a huge impact in dollar terms over the last 16 years: Starting Balance (Sept. 2010) Compound Annual Return Balance In March 2026 $100,000 16.3% (Vanguard ETF) $1,038,689 $100,000 14% (S&P 500) $762,123 Calculations by author. ExpandNYSEMKT: VOOGVanguard Admiral Funds - Vanguard S&P 500 Growth ETFToday's Change(-2.08%) $-8.39Current Price$395.11Key Data PointsDay's Range$394.27 - $401.1652wk Range$286.00 - $456.71Volume407K With that said, the Vanguard ETF is actually down 7.1% so far in 2026, whereas the S&P 500 has declined by a lesser 4.4%. Ongoing geopolitical tensions in the Middle East have sent oil prices soaring, stoking fears of higher inflation and weaker economic activity in the future. Growth stocks sometimes underperform during periods of turmoil in the broader market, as investors cash in some of their gains and reduce risk. Simply put, elevated volatility is the price of admission for an opportunity to earn market-beating returns over the long run. Throughout history, investors who bought market dips have done exceptionally well, and I think technology and AI stocks are likely to continue producing the strongest returns when sentiment eventually turns positive once again. As a result, now might be a great time to buy the Vanguard S&P 500 Growth ETF, especially for investors who are willing to hold on for a long-term period of five years or more.Read NextMar 26, 2026 •By Katie BrockmanIWO vs. VOOG: How Small-Cap Diversification Compares to Large-Cap GrowthMar 25, 2026 •By Katie BrockmanMGK Offers Focused Growth While VOOG Provides Broader Diversification: Which Is the Right ETF for You?Mar 3, 2026 •By Katie BrockmanVONG vs. VOOG: How These Similar Large-Cap Growth ETFs Compare for InvestorsMar 28, 2026 •By Keithen Drury10 AI Stocks I'm Buying Right NowMar 28, 2026 •By Adria CiminoNvidia May be Back in Business in China. Here's What That Means for Revenue.Mar 28, 2026 •By Katie BrockmanShould You Sell Your Stocks Right Now? History Offers a Crystal-Clear Answer.About the AuthorAnthony Di Pizio is a contributing Motley Fool technology analyst covering artificial intelligence, cloud computing, autonomous vehicles, and enterprise software. Previously, Anthony was a licensed fund manager, stock broker, and corporate advisor. He holds a bachelor’s degree in commerce and economics from Macquarie University in Sydney, Australia, along with ASIC RG146 certifications in financial securities and derivatives.TMFAnthonyADSCX@AnthonyADSCStocks MentionedVanguard Admiral Funds - Vanguard S&P 500 Growth ETFNYSEMKT: VOOG$395.11(-2.08%)-$8.39S&P 500 IndexSNPINDEX: ^GSPC$6,368.85(-1.67%)-$108.31*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.