VOOG vs. IWO: Is S&P 500 Stability or Small-Cap Growth Potential the Better Buy Right Now?
Key Points
IWO charges a notably higher expense ratio than VOOG, but both offer roughly the same dividend yield.
VOOG has delivered stronger five-year growth with less severe drawdowns, while IWO is more volatile and small-cap focused.
IWO spreads risk across over 1,000 holdings, tilting toward healthcare and industrials, whereas VOOG is concentrated in large-cap tech.
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The Vanguard S&P 500 Growth ETF (NYSEMKT:VOOG) and the iShares Russell 2000 Growth ETF (NYSEMKT:IWO) both target U.S. growth stocks, but they do so through very different lenses.
VOOG tracks the large-cap S&P 500 Growth Index, emphasizing established giants, while IWO focuses on smaller, fast-growing companies in the Russell 2000 Growth Index.
This comparison highlights where each ETF stands on fees, performance, and risk, helping investors weigh which approach may appeal depending on their goals.
Snapshot (cost & size)
| Metric | VOOG | IWO |
|---|---|---|
| Issuer | Vanguard | iShares |
| Expense ratio | 0.07% | 0.24% |
| 1-yr return (as of Jan. 25, 2026) | 16.16% | 15.31% |
| Dividend yield | 0.49% | 0.56% |
| Beta (5Y monthly) | 1.08 | 1.45 |
| AUM | $22 billion | $13 billion |
Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.
Both funds offer similar dividend yields, making them roughly equivalent in terms of income potential. However, VOOG is notably more affordable on fees, giving it an edge for cost-conscious investors.
Performance & risk comparison
| Metric | VOOG | IWO |
|---|---|---|
| Max drawdown (5 y) | -32.74% | -42.02% |
| Growth of $1,000 over 5 years | $1,880 | $1,097 |
What's inside
IWO tracks U.S. small-cap growth, covering 1,098 stocks with a tilt toward healthcare (making up 26% of the portfolio), technology (23%), and industrials (20%).
Its largest positions — Bloom Energy, Credo Technology Group, and Kratos Defense & Security Solutions — each make up less than 2% of assets, reflecting a broad, diversified approach.
VOOG, by contrast, is concentrated in large-cap U.S. growth stocks. Technology dominates the portfolio, making up close to 50% of assets, followed by communication services and financial services. The fund’s top holdings include Nvidia, Microsoft, and Apple, and they collectively account for over 30% of assets.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Growth ETFs come in all shapes and sizes, and different types can appeal to different investors.
VOOG is focused not just on large-cap stocks, but specifically, companies in the S&P 500. Larger companies tend to be more stable than their smaller counterparts, making them more likely to successfully weather periods of market volatility.
VOOG has experienced a less severe max drawdown compared to IWO, and with a lower beta, it’s also shown milder price fluctuations in recent years.
IWO targets small-cap growth stocks, which can be more volatile — especially during market downturns. While they tend to have greater growth potential than large stocks, IWO has actually underperformed VOOG in both one- and five-year total returns — likely in part due to massive tech companies overperforming in recent years.
Investing in a small-cap ETF like IWO can be a smart way to diversify your portfolio and gain exposure to smaller companies with plenty of growth potential, while VOOG can be a good choice for those seeking access to the largest growth names in the S&P 500.
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Katie Brockman has positions in Vanguard Admiral Funds - Vanguard S&P 500 Growth ETF. The Motley Fool has positions in and recommends Apple, Bloom Energy, Kratos Defense & Security Solutions, 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.
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