Vanguard's Growth ETF Has Returned About 18% a Year for a Decade. I'd Plan on Much Less Through 2030.
Its top holdings are growing earnings fast. But how much of that can a buyer at today's price keep?
The Vanguard Morningstar Growth ETF (VUG) has seen a return of about 18% per year for the past decade. However, a $10,000 investment today could potentially grow to around $15,000 by 2030, which is a return of about 10% per year before dividends. The fund's largest holdings, Nvidia, Apple, and Alphabet, make up around 35% of the fund's assets and have been growing their profits rapidly.
Despite this, the fund's price-to-earnings ratio is currently high at 37 times, and it is estimated to drop to 30 times earnings by 2030. This would result in a modest growth of around 50% for a $10,000 investment in approximately four years.
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