In the five years to September 2026, VUG returned 13.9% a year and VTV returned 12.4%, dividends reinvested. VUG and VTV hold large US companies sorted by style: growth companies in one, value companies in the other. Holding only one of them is a deliberate tilt away from the broad market.
For a representative saver about twenty years from retirement, investing in a taxable account: In this situation, VUG and VTV come out about even. Neither their known costs nor their last five years change the plan's success rate enough to matter.
With only the known costs — the same market for both funds, differing by fees and dividend tax — the money lasted in 96.3% of 10,000 simulated futures with VUG and 95.6% with VTV. Using each fund's own returns from October 2021 to September 2026 instead, the figures were 95.0% and 96.6%. Both funds were run against the identical sequence of market shocks.
Two styles, not better and worse. Growth companies are priced for fast future earnings; value companies are priced cheaply relative to what they earn today. Which style leads changes over long stretches, and has swung both ways over the decades.
Swings and yield. Growth has swung harder, and value pays more of its return as dividends. The first costs a plan that is drawing money out; the second costs a taxable account every year. The scenarios above weigh both.
VUG tracks the Morningstar US Large Cap Growth Index — it holds large US companies that the index classifies as growth stocks. VTV tracks the Morningstar US Large Cap Value Index — it holds large US companies that the index classifies as value stocks.
VUG charges 0.03% a year and yields 0.38%; VTV charges 0.03% and yields 1.82%.
Returns and volatility are measured from monthly returns with dividends reinvested over 60 months — one sample from one market, and weak evidence for telling two broad funds apart, which is why the known-cost result is reported first. Dividends are taxed at 15% in a taxable account by default, the qualified rate most households pay; the page also shows the 0% and 20% brackets. It is the only tax modeled. A 3.8% net investment income tax can also apply to dividends once modified adjusted gross income passes $200,000 ($250,000 joint); it is not included. Retirement spending is held at 70% of income in today's dollars, and contributions exclude any employer match.
Growth and value have each led for long stretches. The simulation shows what the difference in swings and dividend tax costs, and separately what happens if the last five years repeat.