The Motley Fool·2025-12-11 09:18Core Insights - The Vanguard S&P 500 Growth ETF has outperformed the S&P 500 index, delivering a return of 22.7% compared to the S&P 500's 17.8% in 2025, and has consistently beaten the S&P 500 since its inception [2][3] Group 1: ETF Performance - The Vanguard S&P 500 Growth ETF has produced a compound annual return of 16.8% since its inception in 2010, surpassing the S&P 500's average annual return of 13.8% over the same period [12] - The ETF's strong performance is attributed to its significant holdings in high-growth sectors, particularly information technology and communication services, which account for nearly 50% of its total value [9] Group 2: Portfolio Composition - The Vanguard S&P 500 Growth ETF has a unique portfolio composition that focuses on stocks with strong momentum and sales growth, rebalancing quarterly to remove underperforming stocks [5] - The ETF assigns a 15.2% weighting to Nvidia and a 9.1% weighting to Alphabet, compared to their lower representation in the S&P 500, which is 8.4% and 5.1% respectively [6] Group 3: Market Trends and Future Outlook - The ETF's strategy of avoiding underperforming stocks, such as Charter Communications and LyondellBasell, has contributed to its superior returns relative to the S&P 500 [10][11] - Future growth sectors like autonomous vehicle manufacturing, robotics, and quantum computing are expected to drive market performance, with the ETF's quarterly rebalancing ensuring continued exposure to emerging trends [14][15]