Vanguard Growth ETF’s trailing P/E of 33.7 is 9% below its five-year average, and its forward P/E 26.7 implies 20% earnings growth. Nvidia, Apple and Microsoft, which account for 34.4% of assets, drove 57% EPS growth last year, but the fund’s 3.0% earnings yield trails the 4.4% on 10-year Treasuries.
Vanguard Growth ETF’s trailing price-to-earnings ratio stands at 33.7, roughly 9% below its five-year average of 37.0. The forward P/E of 26.7 suggests analysts expect the fund’s aggregate earnings to rise by about 20% over the next year.
The fund’s top five stocks represent 45.5% of its assets, with Nvidia, Apple and Microsoft alone accounting for 34.4%. These three names helped the portfolio deliver approximately 57% aggregate EPS growth over the past 12 months.
Despite attractive growth metrics, VUG’s aggregate earnings yield of 3.0% falls 1.4 percentage points short of the 4.4% yield on 10-year US Treasuries. Investors are effectively paying a premium for growth that currently offers no compensation over risk-free rates.
