SLYG vs. RZG: Which Small-Cap Growth ETF Is the Better Buy for Investors?
Key Points
The State Street SPDR S&P 600 Small Cap Growth ETF (SLYG) charges a lower expense ratio than the Invesco S&P SmallCap 600 Revenue ETF (RZG).
RZG has delivered higher 1-year returns than SLYG, but also experienced a worse 5-year maximum drawdown.
SLYG offers broader diversification than RZG.
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Despite a shared focus on small-cap growth stocks, comparing the Invesco S&P SmallCap 600 Revenue ETF (NYSEMKT:RZG) and the State Street SPDR S&P 600 Small Cap Growth ETF (NYSEMKT:SLYG) reveals some key differences in expense ratios and portfolio concentration.
While both funds target the smaller end of the market-cap spectrum, each ETF uses different filtering criteria. SLYG tracks a traditional growth index, while RZG applies a revenue-weighting methodology to a growth-oriented subset of the S&P SmallCap 600.
Snapshot (cost & size)
| Metric | SLYG | RZG |
|---|---|---|
| Issuer | State Street | Invesco |
| Expense ratio | 0.15% | 0.35% |
| 1-year return (as of July 17, 2026) | 27.31% | 34.14% |
| Dividend yield | 0.64% | 0.42% |
| Beta | 1.08 | 1.04 |
| AUM | $5.2 billion | $135.9 million |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
SLYG is the cheaper fund, with an expense ratio of 0.15% compared to RZG’s 0.35%. SLYG also provides a slightly higher dividend yield of 0.64%.
Performance & risk comparison
| Metric | SLYG | RZG |
|---|---|---|
| Max drawdown (5 yr) | (29.17%) | (38.33%) |
| Growth of $1,000 over 5 years (total return) | $1,457 | $1,435 |
What's inside
Launched in 2006, RZG contains 126 holdings from the S&P SmallCap 600 Index that exhibit strong growth characteristics. Its top sector weightings are healthcare (25.1%), technology (17.3%), and industrials (16.4%). RZG’s largest positions include ACM Research (NASDAQ:ACMR) at 3.7%, Powell Industries (NASDAQ:POWL) at 2.0%, and Argan (NYSE:AGX) at 2.0%.
SLYG tracks the S&P SmallCap 600 Growth Index with a broader 350-holding portfolio. Its top sector weightings include industrials (19.0%), technology (17.7%), and healthcare (17.2%). The fund’s largest positions include Formfactor (NASDAQ:FORM) at 1.4%, Viasat (NASDAQ:VSAT) at 1.3%, and Brightspring Health Services (NASDAQ:BTSG) at 1.2%. SLYG was launched in 2000.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
The core trade-off between these two funds comes down to concentration versus cost.
RZG's revenue-weighting approach means it leans more heavily into healthcare. It also produces a tighter, more selective portfolio of 126 stocks -- a structure that can amplify gains in a strong market but also means individual holdings carry more weight. That helps explain RZG's stronger recent returns as well as its higher 5-year maximum drawdown. SLYG, by spreading exposure across 350 names and tracking a more traditional growth benchmark, smooths out some of that single-stock risk, though that also means it won't capture any single company’s upside quite as sharply.
For cost-conscious investors, SLYG’s advantage matters more than you might think: RZG's 0.35% expense ratio is more than double SLYG's 0.15%, a difference that can compound meaningfully over years of holding. That's fairly typical of the trade-off between niche, factor-based ETFs like RZG and broader index trackers like SLYG -- narrower funds often charge more for their more targeted approach.
Despite all their differences, both of these funds show a similar five-year return. Choosing between them really just depends on what an investor is optimizing for. Those chasing recent momentum and comfortable with higher volatility may lean toward RZG, while investors who prioritize diversification, lower fees, and a slightly higher yield may find SLYG the more suitable long-term core holding.
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Andy Gould has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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