- The VUG seeks to track the performance of the CRSP U.S. Large Cap Growth Index, which selects stocks based on six growth factors.
- While the VUG holds the who's who of great American companies that will likely remain market leaders for years to come, there is always a fair price for any asset.
- At 39x trailing free cash flow, this ETF is anything but fairly valued.
- Even if profit margins remain at their current record high level and revenues continue to grow at their historical rate of 5%, this would leave the CRSP U.S. Large Cap Growth Index overvalued for years, if not decades, to come.
- My short positions in the VUG are not held in isolation, but form part of an overall portfolio designed to benefit from a narrowing in the valuation gap between U.S. growth stocks and international value stocks, while reducing overall volatility.
For further details see:
VUG: The U.S. Growth Boom Faces Major Headwinds