These 6 Vanguard ETFs Are Beating the S&P 500 so Far in 2024. Here's the Best of the Bunch.

We're nearly halfway through 2024, and the great news for investors is that the S&P 500 is on track for another strong performance. After soaring 24% in 2023, the widely followed index is up around 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.

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Image source: Getty Images.

A common denominator for several

The Vanguard S&P 500 Growth Index Fund ETF (NYSEMKT: VOOG) has trounced the S&P 500 this year with a gain of nearly 15.7%. As its name indicates, this ETF focuses on growth stocks in the S&P 500.

There are many of them, as this ETF owns 229 stocks. Its top holdings include Microsoft, Apple, and Nvidia.

You'll probably notice a common denominator with several of the top-performing Vanguard ETFs: They focus on large companies with exceptional growth prospects.

The Vanguard Mega Cap Growth Index Fund ETF (NYSEMKT: MGK) owns the biggest of the big -- growth stocks with market caps near $200 billion or more. There are only 79 stocks in its portfolio, notably including the same three tech giants at the top of the Vanguard S&P 500 Growth Index Fund ETF. This ETF has jumped roughly 13.5% year to date.

The Vanguard Growth Index Fund ETF (NYSEMKT: VUG) is hot on its heels with a gain of 13.3% so far in 2024. This ETF attempts to track the performance of the CRSP US Large Cap Growth index. It owns 200 stocks with the same top holdings as the previously mentioned Vanguard ETFs.

The Vanguard Russell 1000 Growth Index Fund ETF (NASDAQ: VONG) isn't too far behind, with its return of around 13.2% this year. The ETF owns 440 stocks in the Russell 1000 Growth index. Unsurprisingly, its top holdings are also Microsoft, Apple, and Nvidia.

Two exceptions

Not all of the Vanguard ETFs that are beating the S&P 500 focus on large-cap growth stocks. There are two exceptions.

The Vanguard Utilities Index Fund ETF (NYSEMKT: VPU) is perhaps the most unexpected winner in the group. It owns 65 utility stocks, including top holdings NextEra Energy, Southern Co., and Duke Energy.

Although utility stocks don't always keep up with growth stocks, this Vanguard ETF has delivered a return of around 12.5% so far this year. Its total return, including dividends, beats all but two of the other Vanguard ETFs on our list.

Megacap stocks are generally defined as stocks with market caps of at least $200 billion. The Vanguard Mega Cap Index Fund ETF (NYSEMKT: MGC) takes a different approach, owning U.S. stocks representing roughly the top 70% of market capitalization. Its portfolio includes 207 stocks.

Although it doesn't only own growth stocks, the ETF's top holdings mirror those of the Vanguard ETFs that focus on large growth stocks. The Vanguard Mega Cap Index Fund ETF is up around 11.6% year to date.

The best of the bunch

Which of these Vanguard ETFs will be the best of the bunch going forward? It will probably depend in large part 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's well-diversified, with more stocks in its portfolio than all of the other ETFs on the list except for the Vanguard Russell 1000 Growth Index Fund ETF. The stocks in the Vanguard S&P Growth Index Fund have also delivered the strongest earnings growth over the last five years of these six Vanguard ETFs.

However, if the U.S. economy begins to struggle, the Vanguard Utilities Index Fund ETF is likely to outperform the others. Utility stocks are often viewed as safe havens during economic downturns. The attractive dividend yields of many of the stocks in the Vanguard Utilities Index Fund ETF will also boost the ETF's total return.

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Keith Speights has positions in Apple and Microsoft. The Motley Fool has 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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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