VUG Has Delivered Larger Gains, VOO Sports a Higher Dividend Yield and Lower Fees

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The Vanguard Growth ETF (VUG, up 1.38%) focuses on large, growing companies, especially in the technology sector. The Vanguard S&P 500 ETF (VOO, up 0.89%), on the other hand, offers a wider range of U.S. stocks, pays a slightly higher dividend, and has a very slightly lower cost.

Both VUG and VOO are Vanguard funds that automatically track market performance, but they invest in different types of companies. VUG focuses on large, growing companies, particularly in the technology sector, while VOO aims to match the performance of the S&P 500, which includes the 500 largest U.S. companies across various industries. This analysis compares their fees, returns, risk levels, what they invest in, and other key differences to help investors choose the fund that best fits their goals.

Snapshot (Cost & Size)

Metric VUG VOO
Issuer Vanguard Vanguard
Expense ratio 0.04% 0.03%
1-yr return (as of Dec. 16, 2025) 13.1% 11.9%
Dividend yield 0.4% 1.1%
Beta 1.17 1.00
AUM $207.2 billion $861.9 billion

Beta shows how much a stock’s price tends to move up or down compared to the overall stock market, specifically the S&P 500. It’s calculated using five years of weekly price changes. The 1-year return simply shows the total gain or loss over the past 12 months.

VOO has slightly lower fees (0.03% compared to 0.04% for VUG) and offers a better dividend yield (1.1% versus 0.4%). This could make it more attractive for investors looking for income.

Performance & Risk Comparison

Metric VUG VOO
Max drawdown (5 y) (35.62%) (24.52%)
Growth of $1,000 over 5 years $1,923 $1,825

What’s Inside

The Vanguard S&P 500 ETF (VOO) has been tracking the performance of the S&P 500 – representing 505 companies – for more than 15 years. Its investments are heavily weighted towards technology (37%), followed by financial services (12%) and consumer goods (11%). As of recently, its largest holdings include NVIDIA (7.38%), Apple (7.08%), and Microsoft (6.25%). While technology remains a key area, VOO’s tech focus is slightly more diversified compared to funds specifically designed for growth.

Unlike VOO, VUG is designed for growth, heavily invested in technology (52%), communication services (14%), and consumer goods companies that tend to do well when the economy is strong (14%). Its biggest holdings are Apple (11.22%), NVIDIA (11.15%), and Microsoft (9.94%), meaning a large portion of the fund is concentrated in these few stocks. With only 166 stocks in total, VUG’s focus on specific sectors and companies is more noticeable than VOO’s wider range of investments.

For more guidance on ETF investing, check out the full guide at this link.

What This Means For Investors

The Vanguard Growth ETF (VUG +1.38%) and the Vanguard S&P 500 ETF (VOO +0.89%) are both popular and highly regarded exchange-traded funds. They’re known for being relatively safe investments with a good track record and low costs. While owning both isn’t a bad idea, let’s take a closer look at how they stack up against each other to see which one might be the better choice.

Let’s begin by looking at how each fund has performed in the past. Over the last ten years, the VOO fund has seen a total return of 289%, which translates to an average annual growth rate of 14.5% – matching the performance of the S&P 500 index. However, the VUG fund has done even better. Because it holds a larger percentage of major technology stocks, the VUG has delivered a total return of 389%, with an average annual growth rate of 17.2%.

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If you’re looking for income, VOO provides a slightly better return with a 1.1% dividend yield, compared to VUG’s 0.4%. Both funds have very low fees, but VOO is a little less expensive, costing 0.03% in fees versus 0.04% for VUG. Both are also easy to buy and sell, with VUG holding over $200 billion in assets and VOO managing over $800 billion.

In short, VUG tends to be a bit riskier because it invests in growing companies, but this has led to stronger returns. VOO, which aims to match the performance of the S&P 500, is more stable and provides returns similar to that broad market index. Plus, VOO’s higher dividend payments and lower costs could be attractive to investors looking for income or lower fees.

The bottom line: Both ETFs are worthy of consideration for most investors.

Glossary

Here’s a breakdown of common investment terms:

ETF (Exchange-Traded Fund): A type of investment fund that holds a collection of assets, like stocks or bonds, and is bought and sold on stock exchanges.

Expense Ratio: The yearly fee charged by an ETF or mutual fund, expressed as a percentage of your investment.

Dividend Yield: The annual dividend payments from an investment, shown as a percentage of its price.

Beta: A measure of how much an investment’s price tends to move compared to the overall market. Higher beta generally means more risk.

AUM (Assets Under Management): The total value of all the investments a fund manages for its investors.

Max Drawdown: The biggest percentage drop in value an investment fund experiences over a certain period.

Growth Stock: Stock of a company that is expected to grow at a faster rate than the average company.

Large-Cap: Companies with a very high market value, usually over $10 billion.

S&P 500 Index: A measure of how 500 large U.S. companies are performing in the stock market.

Sector: A group of companies that operate in the same industry, like technology or finance.

Portfolio Diversification: A strategy of spreading your investments across different assets and sectors to lower your overall risk.

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2025-12-21 06:11