Given the ongoing market turbulence, there are various strategies investors can consider to navigate the situation effectively. Ideally, if you already have a strategy in place, you can stay calm regardless of market fluctuations.
When markets become volatile, many investors gravitate towards safer stocks, which are likely already part of their diversified portfolios. Another solid approach is index investing, which, while passive, can leverage a broad range of stocks for potential growth.
But there’s more to index investing than just the traditional S&P 500 Exchange-Traded Fund (ETF). This isn’t just about sticking with the basics. If you’re looking for a secure way to grow your investment—and if you have around $2,000 to invest—consider the Vanguard S&P 500 Growth ETF. Here’s why.
Vanguard Growth ETF Overview
The Vanguard Growth ETF focuses on the top performers within the S&P 500, targeting approximately 200 growth stocks. It tracks the S&P 500 growth index, which consists of, well, growth-oriented stocks.
While 200 is fewer than 500, it’s still a considerable number. Since the ETF emphasizes growth stocks, it doesn’t offer the same level of diversification as the full S&P 500. However, it still provides a fair amount of diversity. Vanguard rates it as having a risk factor of four out of five, describing it as “moderate to aggressive.” The average P/E ratio is around 29, which is a bit higher than the S&P 500’s average of 25.
Interestingly, the largest holdings in this ETF aren’t exactly risky; they’re big players like Apple, Amazon, and Nvidia. Unsurprisingly, information technology makes up about 37% of the entire portfolio.
Optimized Index Investment
The growth-focused ETF has often outperformed the regular S&P 500 during various periods. Although it’s typically one of Vanguard’s top performers, this year it has struggled alongside many growth stocks, dropping 7% in 2025, making it one of the lesser performers within the Vanguard lineup.
Nonetheless, it has seen a remarkable 271% growth over the past decade, averaging a 14% annual return, which remains impressive when you look at the bigger picture.
This is often how the market works: it has its ups and downs. It’s crucial to remain patient during the downturns and wait for recovery. When comparing the growth ETF with the Vanguard S&P 500 ETF, a decade ago you’d have likely benefited more from the growth ETF.
One advantage of investing in Vanguard ETFs is their reliability and low costs. Vanguard has recently reduced fees, bringing the growth ETF’s expense ratio down to 0.07%.
Is It a Good Time to Invest?
While it might seem counterintuitive to invest in the growth ETF now, when prices are down, historically, this can be the ideal moment to buy or increase your position. Stepping back can be necessary, but the market has always rebounded to higher levels over time.
These 200 growth stocks within the S&P 500 are likely to recover, presenting potentially higher returns in better conditions. As long as you’re prepared for a long-term hold, investing in this ETF could significantly enhance your portfolio’s capacity for wealth generation.
