Meet the Ultra-Low-Cost Vanguard ETF That Has 53% of Its Holdings in Tech Giants Like the "Magnificent Seven" Stocks

Core Insights - The Vanguard Growth ETF (VUG) has consistently outperformed the market since its inception in January 2004, with an increase of 875% compared to the S&P 500's 482% [6] - The ETF is heavily weighted towards technology, with 62.1% of its holdings in tech companies, primarily due to its market cap-weighted structure [3][4] - The "Magnificent Seven" tech stocks—NVIDIA, Microsoft, Apple, Alphabet, Amazon, Meta Platforms, and Tesla—are significant contributors to the ETF's performance, accounting for a substantial portion of its holdings [2][4] ETF Composition - The Vanguard Growth ETF includes a diverse range of sectors, with the top five sectors being technology (62.1%), consumer discretionary (18.2%), industrials (8.2%), healthcare (5%), and financials (2.9%) [5] - The "Magnificent Seven" stocks represent the following percentages of the ETF: NVIDIA (12.01%), Microsoft (10.70%), Apple (10.47%), Alphabet (6.77%), Amazon (5.55%), Meta Platforms (4.22%), and Tesla (3.70%) [4] Performance Metrics - Over the past decade, VUG has averaged annual returns of 16.4%, outperforming the S&P 500's 12.8% [6] - The ETF has a low expense ratio of 0.04%, which is one of the lowest in the industry, allowing investors to retain more of their gains over time [9] Investment Strategy - Investing in VUG provides exposure to high-growth tech companies while diversifying across other sectors, making it a strategic choice for investors [11] - The concentration in the "Magnificent Seven" stocks suggests that while VUG can be a core holding, it should be complemented with other investments to mitigate risk [11]