We’re almost halfway through 2024, and the good news for investors is that the S&P500 is on track for another strong performance. After climbing 24% in 2023, the widely followed index is up about 10.5% year to date.
However, investors could have obtained even better returns from some exchange-traded funds (ETFs). These six Vanguard ETFs are beating the S&P 500 so far in 2024.
A common denominator for many
THE Vanguard S&P 500 Growth Index Fund ETF (NYSEMKT:VOOG) has beaten the S&P 500 this year with a gain of nearly 15.7%. As its name suggests, this ETF focuses on growth stocks in the S&P 500.
There are many of them since this ETF has 229 stocks. Its main titles include Microsoft, AppleAnd Nvidia.
You’ll probably notice a common thread with many of the best-performing Vanguard ETFs: They focus on large companies with exceptional growth prospects.
THE Vanguard Mega Cap Growth Index Fund ETF (NYSEMKT:MGK) owns the largest of the big growth stocks with a market cap near $200 billion or more. There are only 79 stocks in his portfolio, including the same three tech giants at the top of the Vanguard S&P 500 Growth Index Fund ETF. This ETF has jumped about 13.5% year to date.
THE Vanguard ETF Growth Index Fund (NYSEMKT:VUG) is hot on its heels with a 13.3% gain so far in 2024. This ETF attempts to track the performance of the CRSP US Large Cap Growth hint. It has 200 stocks with the same titles as the Vanguard ETFs mentioned earlier.
THE Vanguard Russell 1000 Growth Index Fund ETF (NASDAQ:VONG) isn’t far behind, returning about 13.2% this year. The ETF holds 440 stocks in the Russell 1000 Growth hint. Unsurprisingly, its top holdings are also Microsoft, Apple and Nvidia.
Two exceptions
Not all Vanguard ETFs that beat the S&P 500 focus on large-cap growth stocks. There are two exceptions.
THE Vanguard Utilities ETF Index Fund (NYSEMKT:VPU) is perhaps the most unexpected winner of the group. It owns 65 utility stocks, including major holdings NextEra Energy, Southern Company.And Duke Energy.
Although utility stocks don’t always track growth stocks, this Vanguard ETF has returned about 12.5% so far this year. Its total return, including dividends, beats all but two other Vanguard ETFs on our list.
Megacap stocks are generally defined as stocks with a market capitalization of at least $200 billion. THE Vanguard Mega Cap ETF Index Fund (NYSEMKT:MGC) takes a different approach, holding U.S. stocks representing roughly the top 70% of market capitalization. Its portfolio includes 207 stocks.
Although it doesn’t solely own growth stocks, the ETF’s top holdings mirror those of Vanguard ETFs that focus on large growth stocks. The Vanguard Mega Cap Index Fund ETF is up about 11.6% year to date.
The best of the group
Which of these Vanguard ETFs will be the best of the bunch in the future? Much will likely depend on how the U.S. economy fares.
If the economy remains strong, I think the Vanguard S&P Growth Index Fund could continue to be the best Vanguard ETF. It is well diversified, with more stocks in its portfolio than every other ETF on the list except the Vanguard Russell 1000 Growth Index Fund ETF. Shares of the Vanguard S&P Growth Index Fund have also generated the strongest earnings growth over the past five years among these six Vanguard ETFs.
However, if the U.S. economy begins to struggle, the Vanguard Utilities Index Fund ETF will likely outperform others. Utility stocks are often considered safe havens during economic downturns. The attractive dividend yields of many stocks in the Vanguard Utilities Index Fund ETF will also increase the ETF’s total return.
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Keith Speights holds positions at Apple and Microsoft. The Motley Fool holds positions in and recommends Apple, Microsoft, NextEra Energy, Nvidia, and Vanguard Index Funds-Vanguard Growth ETF. The Motley Fool recommends Duke Energy and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
These 6 Vanguard ETFs are beating the S&P 500 so far in 2024. Here are the best of the bunch. was originally published by The Motley Fool
