Vanguard S&P 500 Growth ETF Outperforms Market Again in 2024

S&P 500 Growth ETF posted a 35.9% return in 2024, surpassing the S&P 500's 25%. With significant holdings in AI-focused companies like Nvidia and Microsoft, the ETF is poised for further gains in 2025.

Date: 02-02-2025

AI Rating: 7

Performance Highlights: The Vanguard S&P 500 Growth ETF achieved a remarkable total return of 35.9% in 2024, significantly outperforming the S&P 500's 25%. It has a strong track record of beating the S&P 500 since its inception in 2010, indicating strong investor confidence in growth stocks.

Key Drivers: The ETF's success is largely attributed to its top holdings, particularly Nvidia, which has been benefiting from the surge in AI technology. Nvidia's strategic positioning has led to triple-digit revenue growth each quarter and an impressive stock increase of 490% over the last two years. The ETF holds 53.9% of its total value in its top 10 holdings, which include major tech players like Microsoft, Apple, and Tesla, all of which are heavily investing in AI advancements.

Market Outlook: Experts predict growth stocks will continue to lead the market due to the ongoing and transformative impact of AI. The technology is expected to add $15.7 trillion to the global economy by 2030, suggesting significant growth potential for the companies involved. However, growth stocks are known to decline sharply during broader market corrections, underscoring the importance of vigilance in economic trends.

Investment Implications: Given that the ETF's return was mainly driven by strong gains from its top holdings, continued investment in tech stocks could lead to further outperformance. Investors might seek to capitalize on this trend, considering the projected growth in the AI sector and the ETF's positive track record.

Stocks: NVDA AAPL MSFT FB AMZN TSLA GOOGL GOOG AVGO