Vanguard is making a lot of investors happy these days. Forty-two out of 86 people exchange-traded funds (ETFs) Companies managed by the company have achieved total double-digit year-to-date returns. Sixteen Vanguard ETFs claim a total return of at least 20%. What is the best-performing Vanguard ETF so far in 2024?

Top contestants

Some of the top contenders in Vanguard’s ETF family may surprise you. For example, Vanguard Utilities ETF (VPU -0.76%) It has been ranked the best-performing Vanguard ETF of 2024 for most of the past few weeks. As of this writing, its total return is 25.7%, enough to rank third among all Vanguard ETFs.

Service stocks are generally not the most exciting artists. However, the growing expectation that the Federal Reserve will lower interest rates and ultimately an actual rate cut by the Fed has provided a welcome headwind for the utilities sector and the Vanguard Utilities ETF.

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Vanguard Communications Services ETF (VOX 2.52%) It’s the second best-performing Vanguard ETF of the year so far, with a total return of 27.3%. Because most of the stocks owned by the ETF pay either no dividends or relatively small dividends, nearly all of this total return is due to share price appreciation.

Three stocks were particularly important for the Vanguard Communication Services ETF’s breakout year. Facebook parent Meta Platforms It accounts for 23.2% of the ETF portfolio. The share price is up nearly 58% year to date. Class A and Class C shares of Google parent company Alphabet Vanguard Communications Services accounts for a total of 21.1% of the ETF’s total assets. Both Alphabet shares are up 21% in 2024.

The best-performing Vanguard ETF so far this year

But no Vanguard ETF Vanguard S&P 500 Growth ETF (VOOG 2.52%) this year. This ETF’s total return exceeds 28%. The share price is up over 27% year to date.

VOOG data Y Charts

Vanguard S&P Growth ETF attempts to track the performance of the S&P 500 Growth Index. This includes index members. S&P 500 classified as growth stocks based on sales growth, momentum, and the ratio of earnings growth to share price.

This Vanguard ETF currently holds 234 stocks. Its five largest holdings are: Apple, Microsoft, Nvidia, Amazonand Meta. Together, these stocks make up approximately 45.8% of the ETF portfolio. Nvidia has been a particularly big winner this year, with its shares soaring 175%.

Since its inception in September 2010, the Vanguard S&P 500 Growth ETF has delivered an average annual total return of 16%. As with most Vanguard funds, costs did little to impact these returns. ETF’s annual expense ratio A rate as low as 0.1%.

Is the Vanguard S&P 500 Growth ETF still a good choice to buy?

There’s no guarantee that the Vanguard S&P 500 Growth ETF can continue to generate such a high total return. The fund’s valuation may decline due to the average price-to-earnings ratio of the stocks it owns being 34.4.

Although it has a large number of stocks in its portfolio, this Vanguard ETF does not offer as much diversity as many investors might prefer. The ETF’s largest holdings make up a large percentage of its total portfolio and tend to move in the same direction.

But one key reason why the Vanguard S&P 500 Growth ETF’s top stocks have performed well lately is the continued rise in demand for artificial intelligence (AI) applications. If you believe demand for AI will continue to grow (which seems likely at this point), this high-flying Vanguard ETF should still be a good choice to buy right now, despite the high valuation.