VUG vs. TSM

Last updated Jun 13, 2026

VUG (Vanguard Growth ETF) is Large Cap Growth Equities fund tracking the CRSP US Large Cap Growth Index, while TSM (Taiwan Semiconductor Manufacturing Company Limited) is a stock. Over the past 10 years, VUG returned 17.90%/yr vs 35.80%/yr for TSM. A 0.62 correlation means they provide meaningful diversification when combined.

Performance

VUG vs. TSM - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Growth ETF (VUG) and Taiwan Semiconductor Manufacturing Company Limited (TSM). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VUG achieves a 4.99% return, which is significantly lower than TSM's 40.22% return. Over the past 10 years, VUG has underperformed TSM with an annualized return of 17.90%, while TSM has yielded a comparatively higher 35.80% annualized return.

VUG

• 1D: 0.18%
• 1M: -2.56%
• YTD: 4.99%
• 6M: 5.66%
• 1Y: 21.15%
• 3Y*: 23.38%
• 5Y*: 13.78%
• 10Y*: 17.90%

TSM

• 1D: 0.68%
• 1M: 6.28%
• YTD: 40.22%
• 6M: 45.91%
• 1Y: 98.93%
• 3Y*: 60.80%
• 5Y*: 31.30%
• 10Y*: 35.80%

*Multi-year figures are annualized to reflect compound growth (CAGR)

VUG vs. TSM - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VUG Vanguard Growth ETF	4.99%	19.40%	32.69%	46.83%	-33.16%	27.35%	40.25%	37.03%	-3.32%	27.72%
TSM Taiwan Semiconductor Manufacturing Company Limited	40.22%	55.91%	92.58%	42.33%	-36.75%	12.09%	92.67%	64.85%	-3.50%	41.46%

Correlation

The correlation between VUG and TSM is 0.63, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.63
Correlation (3Y) Calculated over the trailing 3-year period	0.65
Correlation (5Y) Calculated over the trailing 5-year period	0.66
Correlation (10Y) Calculated over the trailing 10-year period	0.63
Correlation (All Time) Calculated using the full available price history since Jan 30, 2004	0.62

The correlation between VUG and TSM has been stable across timeframes, ranging from 0.62 to 0.66 - a consistent structural relationship.

Return for Risk

VUG vs. TSM — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

VUG

VUG Risk / Return Rank: 36
VUG Sharpe Ratio Rank: 41
VUG Sortino Ratio Rank: 38
VUG Omega Ratio Rank: 40
VUG Calmar Ratio Rank: 30
VUG Martin Ratio Rank: 33

TSM

TSM Risk / Return Rank: 93
TSM Sharpe Ratio Rank: 94
TSM Sortino Ratio Rank: 92
TSM Omega Ratio Rank: 90
TSM Calmar Ratio Rank: 94
TSM Martin Ratio Rank: 96

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

VUG vs. TSM - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Growth ETF (VUG) and Taiwan Semiconductor Manufacturing Company Limited (TSM). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	VUG	TSM	Difference
Sharpe ratio: Return per unit of total volatility	1.29	2.71	-1.42
Sortino ratio: Return per unit of downside risk	1.78	3.30	-1.52
Omega ratio: Gain probability vs. loss probability	1.23	1.40	-0.17
Calmar ratio: Return relative to maximum drawdown	1.29	5.48	-4.20
Martin ratio: Return relative to average drawdown	4.43	19.42	-15.00

VUG vs. TSM - Sharpe Ratio Comparison

The current VUG Sharpe Ratio is 1.29, which is lower than the TSM Sharpe Ratio of 2.71. The chart below compares the historical Sharpe Ratios of VUG and TSM, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

VUG vs. TSM - Drawdown Comparison

The maximum VUG drawdown since its inception was -50.68%, smaller than the maximum TSM drawdown of -89.08%. Use the drawdown chart below to compare losses from any high point for VUG and TSM.

Drawdown Indicators

	VUG	TSM	Difference
Max Drawdown Largest peak-to-trough decline	-50.68%	-89.08%	+38.40%
Max Drawdown (1Y) Largest decline over 1 year	-16.53%	-18.14%	+1.61%
Max Drawdown (3Y) Largest decline over 3 years	-22.85%	-36.82%	+13.97%
Max Drawdown (5Y) Largest decline over 5 years	-35.61%	-56.47%	+20.86%
Max Drawdown (10Y) Largest decline over 10 years	-35.61%	-56.47%	+20.86%
Current Drawdown Current decline from peak	-5.56%	-4.87%	-0.69%
Average Drawdown Average peak-to-trough decline	-7.09%	-42.85%	+35.76%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.79%	5.11%	-0.32%

Volatility

VUG vs. TSM - Volatility Comparison

The current volatility for Vanguard Growth ETF (VUG) is 5.73%, while Taiwan Semiconductor Manufacturing Company Limited (TSM) has a volatility of 13.42%. This indicates that VUG experiences smaller price fluctuations and is considered to be less risky than TSM based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VUG	TSM	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.73%	13.42%	-7.69%
Volatility (6M) Calculated over the trailing 6-month period	13.00%	28.65%	-15.65%
Volatility (1Y) Calculated over the trailing 1-year period	16.46%	36.69%	-20.23%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	22.30%	37.46%	-15.16%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	21.48%	34.23%	-12.75%

Dividends

VUG vs. TSM - Dividend Comparison

VUG's dividend yield for the trailing twelve months is around 0.39%, less than TSM's 0.83% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
TSM Taiwan Semiconductor Manufacturing Company Limited	0.83%	1.00%	1.18%	1.78%	2.49%	1.57%	1.56%	3.46%	3.64%	2.32%	2.61%	2.54%
VUG Vanguard Growth ETF	0.39%	0.41%	0.47%	0.58%	0.70%	0.48%	0.66%	0.95%	1.32%	1.14%	1.39%	1.30%

Frequently Asked Questions

Can I hold both VUG and TSM in my portfolio?

VUG and TSM have a correlation of 0.63, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VUG or TSM?

TSM has higher volatility (13.42%) compared to VUG (5.73%). In terms of maximum drawdown, VUG dropped -50.68% vs TSM's -89.08%.

Which has better risk-adjusted returns?

TSM currently has the higher Sharpe Ratio (2.71 vs 1.29), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.