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The Vanguard ETF Showdown: Which of the “Magnificent Eight” Should You Go All-In On?

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Investing can often feel like a never-ending saga, especially when you’re looking to get your hands on multiple stocks. It’s not hard, just time-consuming. Fortunately, there’s a hero in this story – exchange-traded funds (ETFs). Like a skilled magician, they allow you to grab a bunch of stocks in one simple swoop.

With the towering “Magnificent Seven” stocks currently ruling the stock market kingdom, many investors are eyeing the option to own them all. You know what makes this quest easier? One of Vanguard’s ETFs. Yes, you heard it right, own all seven stocks effortlessly with just one move into one of these Vanguard ETFs.

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The Vanguard Vanguard Eight: A New Lineup Emerges

Vanguard, a heavyweight in the fund management realm known for its cost-effective funds, has a lineup of eight ETFs that collectively own the Magnificent Seven stocks.

First in this lineup is the Vanguard Total Stock Market ETF (NYSEMKT: VTI). This ETF, with its wide net, holds almost the entire U.S. stock market in its clutches. Among its 3,731 stocks, you’ll find renowned names like Microsoft, Apple, Nvidia, Amazon, Meta Platforms, Alphabet, and Tesla.

The Vanguard ESG U.S. Stock ETF (NYSEMKT: ESGV), on the other hand, focuses on U.S. stocks that meet specific environmental, social, and corporate governance (ESG) measures. All seven Magnificent stocks check the sustainability boxes, standing alongside 1,456 other stocks.

Considering the market capitalization, the smallest Magnificent Seven stock (Tesla) boasts over $560 billion. The Vanguard Mega Cap ETF (NYSEMKT: MGC) dives into stocks with market caps of $200 billion or more. Then we have the Vanguard Large-Cap ETF (NYSEMKT: VV), which hoards U.S. large-cap firms – it’s a solid bet that both ETFs harbor positions in the Magnificent Seven stocks.

Each of the Magnificent Seven has earned its spot in the S&P 500 club. The Vanguard S&P 500 ETF (NYSEMKT: VOO), which shadows the S&P 500, possesses shares in all seven stocks.

Interest in the Magnificent Seven stems from their red-hot performance. Take Nvidia, for instance, with a whopping 240% surge in its shares over the past year. The Vanguard Mega Cap Growth ETF (NYSEMKT: MGK) focuses on mega-cap growth while the Vanguard Growth ETF (NYSEMKT: VUG) centers on large-cap growth. Unsurprisingly, the Vanguard S&P 500 Growth ETF (NYSEMKT: VOOG) joins the party, focusing solely on S&P 500 growth stocks, and yes, owning all seven “Magnificent” lights.

The Vanguard Vanguard Eight Face-Off: A Comparison

These “Magnificent Eight” Vanguard ETFs have distinct objectives. Let’s pit them against each other – annual expense ratio, risk, and performance. Here’s a quick look at how they stack up:

ETF Annual Expense Ratio

Risk Level*

5-Year Performance Performance Since Inception
Vanguard Total Stock Market ETF 0.03% 4 13.85% 8.52%
Vanguard ESG U.S. Stock ETF 0.09% 4 14.96% 12.98%
Vanguard Mega Cap ETF 0.07% 4 15.49% 10.5%
Vanguard Large-Cap ETF 0.04% 4 14.65% 10.01%
Vanguard S&P 500 ETF 0.03% 4 14.72% 14.27%
Vanguard Mega Cap Growth ETF 0.07% 4 19.59% 12.73%
Vanguard Growth ETF 0.04% 4 14.74% 11.16%
Vanguard S&P 500 Growth ETF 0.10% 4 14.1% 15.64%

Data source: Vanguard. All data as of the time of writing. *Risk level as rated by Vanguard from 1 (lowest risk) to 5 (highest risk).

The story among the eight Vanguard ETFs tells us that they’ve got their bases pretty much covered. None flaunt outlandish annual expense ratios, and they’re all in the same risk territory according to Vanguard. Plus, they’ve served up double-digit returns over the last half-decade.

However, the performance since inception sets them apart, with the Vanguard S&P 500 Growth ETF dominating the field while the Vanguard Total Stock Market ETF lags behind. It’s worth noting that these ETFs entered the scene at different times, which could skew the inception-based performance. And remember, the golden rule applies to each ETF: Past gains are no crystal ball for future riches.

Choosing the Champion

Each investor has their own riches-to-rags tale and hence prefers a different path to the treasure trove. So, when it comes to selecting the mightiest “Magnificent Eight” Vanguard ETF, the choice is yours to make.

Fancy more diversification? The Vanguard Total Stock Market ETF might just be your golden fleece. But if you want the Magnificent Seven to grab a larger slice of the pie, the Vanguard Mega Cap Growth ETF is like music to your ears. A whopping 57% of the ETF is composed of Microsoft, Apple, Amazon, Nvidia, Meta, Alphabet, and Tesla. Bon appétit!

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The words and thoughts expressed herein are the author’s and don’t necessarily mirror those of Nasdaq, Inc.

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