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Vanguard’s VOOG Is Cheaper to Buy but Remains Concentrated in Big Tech

Concentration in a few large technology names raises downside risk for investors.

Overview

  • Vanguard cut VOOG’s per-share price with a 6-for-1 split, making the S&P 500 Growth ETF easier for small or new investors to buy.
  • The fund tracks an S&P 500 Growth index that selects 146 companies using S&P Dow Jones’s growth tests of momentum, earnings-change-to-price and revenue growth.
  • VOOG is market-cap-weighted so its top holdings carry outsized weight; Nvidia was the largest single holding at roughly 14.6% and technology plus communication services made up about 68.8% of the fund.
  • That heavy tech tilt helped VOOG outperform the broad S&P 500 over the past decade, but it also means the ETF could underperform if value stocks regain favor or large tech names weaken.
  • The fund’s profile matters against a backdrop of massive passive ETF flows into S&P products because market-cap weighting concentrates gains and losses in the biggest companies and changes the risk profile for retail investors.