Growth-Oriented ETFs: VONG Has Lower Fees, While IWY Has Delivered Higher Returns

Vanguard Russell 1000 Growth ETF (NASDAQ:VONG) and iShares Russell Top 200 Growth ETF (NYSEMKT:IWY) both focus on large-cap U.S. growth stocks, but VONG charges lower fees and holds a broader swath of companies, while IWY leans more heavily into the technology sector with a more concentrated portfolio.

Both VONG and IWY aim to capture the performance of large-cap U.S. growth companies, appealing to investors seeking long-term capital appreciation from market leaders. This comparison looks at cost, diversification, sector exposure, risk, and recent returns to help clarify which ETF may appeal more for a particular portfolio.

Snapshot (Cost & Size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.

VONG looks more affordable with a 0.07% expense ratio, undercutting IWY's 0.20% fee. VONG also offers a slightly higher dividend yield of 0.5% versus 0.4% for IWY.

Performance & Risk Comparison

What's Inside

IWY tracks large-cap U.S. growth names with a pronounced technology focus—66% of assets—alongside 11% in consumer cyclicals and 7% in healthcare. With just 110 holdings, the fund is more concentrated than most broad growth peers. Top positions include Nvidia Corp (NASDAQ:NVDA) at 13.88%, Apple Inc (NASDAQ:AAPL) at 12.12%, and Microsoft Corp (NASDAQ:MSFT) at 11.41%. IWY has a fund age of 16.3 years, offering a long track record for investors to evaluate.

VONG, in contrast, provides broader diversification with 394 holdings and a slightly more balanced sector allocation: 53% technology, 13% consumer cyclicals, and 13% communication services. Its top holdings—NVIDIA Corp, Apple Inc, and Microsoft Corp—are similar, but each represents a smaller share of assets, limiting single-stock concentration risk. Neither fund introduces leverage, currency hedging, or other structural quirks.

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What This Means For Investors

There's no shortage of great ETFs out there for growth-oriented investors. And, in their own ways, both Vanguard Russell 1000 Growth ETF (VONG) and iShares Russell Top 200 Growth ETF (IWY) could fit the bill for any given growth investor. Here are the key details that could help someone decide between the two.

First off, VONG takes a more diversified approach, with nearly 400 holdings spread over many industries. Big tech names like Nvidia, Apple, and Microsoft remain the bedrock of its holdings, but the fund also holds plenty of other names from sectors like retail, healthcare, and financials. Perhaps VONG's biggest appeal is its expense ratio of 0.07% -- meaning that investors only pay $7 in fees for every $10,000 invested in the fund.

Turning to IWY, investors find a fund that zeroes in on the top growth companies. Rather than 400 holdings, IWY has closer to 100 holdings. As a result, big tech dominates. Nvidia, Apple, and Microsoft alone comprise 37% of its overall portfolio. Over the last five years, this concentration in big tech has paid off. IWY has generated a total return of 118%, equating to a compound annual growth rate (CAGR) of 16.9%. That surpasses VONG which has generated a total return of 106%, with a CAGR of 15.5%.

In summary, IWY has generated superior returns, albeit with a higher expense ratio of 0.20%. Meanwhile, VONG has also delivered solid returns (beating the S&P 500) over the last five years. Its broader holdings list gives it superior diversification, and its lower expense ratio means investors pay less in fees. In short, both ETFs remain solid choices for growth-oriented investors, which means investors can tailor their choice to fit their investment philosophy. More aggressive investors may select IWY, while slightly more conservative and cost-conscious growth investors may favor VONG.

Glossary

ETF: Exchange-traded fund, a basket of securities that trades on an exchange like a stock.
Expense ratio: Annual fund operating costs, expressed as a percentage of the fund's average assets.
Diversification: Spreading investments across many securities or sectors to reduce the impact of any single holding.
Sector allocation: How a fund's assets are divided among different parts of the economy, such as technology or healthcare.
Dividend yield: Annual dividends per share divided by the current share price, shown as a percentage.
Total return: Investment performance including price changes plus all dividends and distributions, assuming reinvestment.
Beta: Measure of an investment's volatility compared with the overall market, often the S&P 500.
Max drawdown: The largest peak-to-trough decline in value over a specific period.
Assets under management (AUM): Total market value of all assets that a fund manages for investors.
Holdings: The individual securities, such as stocks or bonds, that a fund owns.
Concentration risk: Risk that poor performance of a few large positions significantly hurts a portfolio's returns.
Leverage: Using borrowed money or derivatives to increase exposure, which can amplify gains and losses.

Jake Lerch has positions in Nvidia. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.