The article discusses the benefits of the Vanguard S&P 500 Growth ETF for long-term wealth

From Nasdaq: 2024-11-28 06:00:00

A Roth IRA offers tax-free withdrawals in retirement, making it ideal for growth investing. The Vanguard S&P 500 Growth ETF (VOOG) has outperformed the S&P 500, focusing on tech giants like Apple and Microsoft. Warren Buffett recommends the Vanguard S&P 500 ETF (VOO) for broader market exposure with lower fees.

The Vanguard S&P 500 Growth ETF’s growth tilt is balanced with high standards. Despite a higher price-to-earnings ratio, the fund maintains profitability and growth potential. Buffett’s simpler approach with the Vanguard S&P 500 ETF offers lower fees and broader diversification, but historically lower returns than the growth-focused fund.

Investment fees matter, with the growth ETF charging 0.10% annually compared to the S&P 500 ETF’s 0.03%. The $7 annual fee difference can compound over time, but the growth fund’s higher returns may offset this. Both funds are cost-efficient, with the growth fund offering concentrated exposure to growth companies.

The growth fund’s concentrated exposure comes with increased volatility, amplifying market movements. Long-term Roth IRA investors may accept this for greater growth potential. Despite overlap in top holdings, the growth fund’s focus on stronger growth characteristics has led to outperformance compared to the S&P 500 ETF.

For aggressive growth investments in a Roth IRA, the Vanguard S&P 500 Growth ETF offers tax-free growth benefits. Despite potential volatility, the fund’s focus on quality growth companies positions it well for long-term wealth creation. Consider the Motley Fool’s analysis before investing in Vanguard Admiral Funds – Vanguard S&P 500 Growth ETF.



Read more at Nasdaq: Building Long-Term Wealth: Why I Chose This Vanguard Growth Fund for My Roth IRA