U.S. stock index futures edged higher on Wednesday as investors were hopeful of a further decline in inflation which could temper the Federal Reserve's hawkish stance on monetary policy.
U.S. stock index futures edged higher on Wednesday as investors were hopeful of a further decline in inflation which could temper the Federal Reserve's hawkish stance on monetary policy.
A "special rebalance" of the Nasdaq 100 index will take place later this month as exchange operator Nasdaq looks to reduce the concentration of heavyweight companies that account for nearly half of the index's weight.
Travel stocks and tech are two hot places to invest this year. So far in 2023, Nvidia (NASDAQ: NVDA), Meta Platforms (NASDAQ: META), and Carnival Corp. (NYSE: CCL) have been the best-performing stocks on the S&P 500, and they are all up more than 130%.
Wow. I can't think of a better word to describe what a year 2023 has been so far for Nvidia (NASDAQ: NVDA). Shares of the chipmaker have skyrocketed close to 190%. Nvidia even joined the exclusive club of companies with market caps of $1 trillion or more.
Artificial intelligence (AI) has helped Nvidia (NASDAQ: NVDA) become a $1 trillion company. It's become clear that the chipmaker is going to play a critical role in the growth of this technology with its powerful graphics cards, which are used to help train large AI models.
Chip designer Arm is in talks to bring in Nvidia as an anchor investor as it presses ahead with plans for a New York listing as soon as September, the Financial Times reported on Wednesday.
The semiconductor industry, foundational to the functioning of modern technology, has been experiencing considerable growth and attention in recent years. Semiconductors, or small chips function as the brain for various devices from smartphones and computers to vehicles and appli
In 2023, growth stocks, primarily led by a revitalized tech sector excited by the promise of
AI advancements, have been the market frontrunners. This surge is, in part, due to easing inflation concerns that previously plagued growth stocks last year.
Against this bullish backdrop, two of the market’s top growth ETFs have raced out to impressive year-to-date gains just over halfway through 2023 -- the
Schwab U.S. Large-Cap Growth ETF (
NYSEARCA:SCHG)
has returned 35.1% so far in 2023, while the
Vanguard Growth ETF (
NYSEARCA:VUG)
has returned a slightly lower 32.8%.
So, which of these two popular blue chip growth ETFs is the better buy now?
Which Stocks Do These ETFs Hold?
SCHG is an ETF from Charles Schwab with $19.2 billion in assets under management (AUM) that invests in the Dow Jones U.S. Large-Cap Growth Total Stock Market Index. VUG is a much larger ETF from Vanguard with $92.1 billion in AUM that invests in an index that tracks the returns of large-cap growth stocks.
Both ETFs feature strong collections of top growth stocks. VUG owns 240 stocks, and its top 10 holdings make up about half of the fund. Below, you’ll find an overview of
VUG’s top 10 holdings using TipRanks’ holdings tool.
Meanwhile, SCHG has a similar portfolio construction, holding 242 stocks, and its top 10 holdings make up a slightly higher 55.6% of the fund. Check out
SCHG’s top 10 holdings below.
As you can see, there is plenty of overlap between the top holdings of the two funds. Both heavily feature the mega-cap technology stocks that have done much of the heavy lifting to propel the market higher all year. Apple (
NASDAQ:AAPL
), Microsoft (
NASDAQ:MSFT
), Amazon (
NASDAQ:AMZN
), and Nvidia (
NASDAQ:NVDA
) are the top four holdings for both funds, and they share eight of the same top 10 holdings.
The top holdings of both funds also feature strong Smart Scores. Nine of VUG’s top 10 holdings feature Smart Scores of 8 or better, while eight of SCHG’s do. The
Smart Score is a proprietary quantitative stock scoring system created by TipRanks. It gives stocks a score from 1 to 10 based on eight market key factors. A Smart Score of 8 or higher is equivalent to an Outperform rating.
VUG and SCHG both feature ETF Smart Scores of 8 out of 10.
Both VUG and SCHG are dividend payers, although they don't sport the types of yields that will draw in income investors. VUG currently
yields 0.6%, while SCHG yields a slightly lower
0.45%.
Is VUG Stock a Buy, According to Analysts?
Turning to Wall Street, VUG has a Moderate Buy consensus rating, as 66.84% of analyst ratings are Buys, 29.84% are Holds, and 3.32% are Sells. At $302.69, the
average VUG stock price target implies 7.5% upside potential.
Is SCHG Stock a Buy, According to Analysts?
Looking at SCHG, it has a Moderate Buy consensus rating, as 68.05% of analyst ratings are Buys, 28.38% are Holds, and 3.57% are Sells. At $80.35, the
average SCHG stock price target implies 7.75% upside potential.
Investor-Friendly Fees
One area where these two ETFs really stand out is in terms of their fees. Both SCHG and VUG feature very attractive expense ratios. In fact, they both charge just 0.04% in fees. This is among the most advantageous fees you will find in the market today.
An investor allocating $10,000 towards SCHG or VUG would pay just a barely-noticeable $4 in fees in year one. Assuming a return of 5% a year over the next decade and that the current expense ratios remain constant, this same investor would pay only $51 in fees over 10 years.
Long-Term Performance Comparison
In addition to their low costs, these ETFs also stand out because of the impressive performances that they have put up over the long term.
As of June’s close, VUG had an impressive one-year total return of 28% and a three-year annualized total return of 12.6%. Over the past five years, it posted an excellent 14.5% annualized total return, and over the past decade, it posted an even better 14.9% annualized total return.
Moving onto SCHG, as of the end of June as well, it had a one-year total return of 30%. Further, it posted a three-year annualized total return of 14.4%, a five-year annualized total return of 15.4%, and a stellar 10-year annualized return of 15.7%. So, as good as VUG has been, as you can see, SCHG managed to outperform it over each of these time frames.
Long-time investors know that it’s very difficult to beat the market over the long run. Using the popular
Vanguard S&P 500 ETF (
NYSEARCA:VOO)
as a proxy for the S&P 500 (
SPX
), both SCHG and VUG have beaten VOO's one-year total return of 19.5%.
Meanwhile, its three-year annualized return of 14.6% is better than VUG’s but trails that of SCHG. Further, both VUG and SCHG beat VOO’s five-year annualized total return of 12.3%, and both trump its 10-year annualized total return of 12.8% as well.
Therefore, while SCHG has outperformed VUG over time, both of these ETFs are pretty good investment vehicles in that they have been beating the broader market over the long run.
Below, you’ll find
a comparison of VUG and SCHG based on performance, fees, and a variety of other criteria, with VOO added in for good measure, using TipRanks’ ETF Comparison Tool, which enables investors to compare up to 20 ETFs at once.
Investor Takeaway
These are both low-fee, investor-friendly ETFs with great portfolios and great long-term performances to match. While past performance is no guarantee of future results, SCHG has beaten VUG over each of the time frames discussed above, making it the top choice between the two, but both look like great ETFs as they have both beaten the broader market over the course of the past decade.
I believe these are ETFs that investors can view as core long-term holdings that they can build their portfolios around. With growth stocks surging so far in 2023, investors can consider starting positions in these ETFs and then dollar-cost averaging into them over time during periods of market weakness.
Disclosure
Active ETFs, which currently represent less than 6% of total assets, have gathered over 20% of all net flows this year. This increasing investor interest in active strategies is driven by uncertain market conditions and the belief
Nvidia (NVDA) closed at $424.05 in the latest trading session, marking a +0.53% move from the prior day. This change lagged the S&P 500's 0.67% gain on the day. Meanwhile, the Dow gained 0.93%, and the Nasdaq, a tech-heavy ind
Where will Nvidia (NASDAQ: NVDA) be in 10 years? If you invested $1,000 in NVDA stock 10 years ago, it would be worth over $115,000 today. But you don't care about the past; you want to know where Nvidia will be in another decade. In this Nvidia stock analysis video, we'll be tak
NVIDIA Corporation (NVDA) is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. NVIDIA is gaining from strong growth of artificial intelligence, high-performance computin
What happened
Shares of Taiwan Semiconductor Manufacturing Company (NYSE: TSM) jumped more than 2% in morning trading Tuesday before settling down to an 0.8% gain as of 3 p.m. ET. This isn't a huge gain -- but it's enough to erase the stock's losses in response to a reported reve
What happened
Shares of Upwork (NASDAQ: UPWK), the online freelancer hiring marketplace, were gaining today after the company announced a new AI services hub to help businesses find the AI talent and solutions they need.
A "special rebalance" of the Nasdaq 100 index will take place later this month as exchange operator Nasdaq looks to reduce the concentration of heavyweight companies that account for nearly half of the index's weight.
Microsoft MSFT recently implemented another round of job cuts, resulting in the layoff of 276 employees, with a focus on customer service, support and sales teams. These job cuts extend beyond the 10,000 global layoffs that MSFT h
A teenage member of the Lapsus$ hacking group hacked Uber and fintech firm Revolut then blackmailed the developers of best-selling videogame Grand Theft Auto, prosecutors have told a London court.
The semiconductor industry, which has been suffering over the past year, seems to be making a steady rebound. Sales increased for the third consecutive month in May, per the latest report from the Semiconductor Industry Associatio
Below is Validea's guru fundamental report for NVIDIA CORP (NVDA). Of the 22 guru strategies we follow, NVDA rates highest using our Quantitative Momentum Investor model based on the published strategy of Wesley Gray. This momentum model looks for stocks with strong and consiste