Vanguard Small-Cap Growth ETF vs Russell 1000 Growth ETF. Should Investors Go Small- or Large-Caps for Growth in 2026?

The choice between Vanguard Russell 1000 Growth ETF (NASDAQ:VONG) and Vanguard Small-Cap Growth ETF (NYSEMKT:VBK) comes down to a preference for large-cap stability versus the potential volatility of small-cap growth assets.

Growth investors often choose between the established dominance of massive corporations and the explosive potential of smaller firms. Vanguard, as one of the largest fund companies, offers options for both.

VONG tracks large-cap growth stocks, whereas VBK provides exposure to the smaller end of the market capitalization spectrum. Both funds are managed by Vanguard and share several traits, including low costs and broad diversification within their respective segments.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield as of July 10 close.

Vanguard Small-Cap Growth ETF is slightly more affordable with a 0.05% expense ratio compared to 0.06% for Vanguard Russell 1000 Growth ETF. The yield difference is minimal, with VONG offering a slightly higher 0.50% payout than its small-cap counterpart.

Performance & risk comparison

What's inside

Vanguard Russell 1000 Growth ETF allocates capital to large-cap equities in the Russell 1000 Growth Index. This benchmark is broadly diversified and primarily comprises growth-oriented stocks from substantial American corporations. Its largest positions include Nvidia Corp (NASDAQ:NVDA) at 13%, Apple Inc (NASDAQ:AAPL) at 11.9%, and Microsoft Corp (NASDAQ:MSFT) at 9%. The fund holds 387 companies, with a heavy sector concentration in technology at 54%, consumer cyclical at 13%, and communication services at 12%. It was launched in 2010. Vanguard Russell 1000 Growth ETF has paid $0.58 per share over the trailing 12 months, which on its recent ~$127.57 share price works out to a 0.50% yield.

Vanguard Small-Cap Growth ETF offers exposure to the smaller end of the market capitalization spectrum by tracking the CRSP U.S. Small Cap Growth Index. While the large-cap fund is top-heavy, this fund spreads its assets across 550 holdings, providing more granular exposure to growth firms. Its largest positions include Astera Labs Inc (NASDAQ:ALAB) at 1.4%, Ciena Corp (NYSE:CIEN) at 1.1%, and Rocket Lab Corp (NASDAQ:RKLB) at 1.1%. Sector exposure is more balanced than that of its large-cap counterpart, with technology at 29%, industrials at 25%, and healthcare at 15%. It was launched in 2004. Vanguard Small-Cap Growth ETF has paid $1.53 per share over the trailing 12 months, which on its recent ~$354.19 share price works out to a 0.40% yield.

Which fund is the better buy?

Both of these Vanguard funds invest in U.S.-listed stocks that have a growth profile. There are some differences to consider, however.

The Small Cap Growth ETF — VBK — is largely dedicated to small-cap equities, with 56% of its holdings classified as small caps, 43% as mid caps, and 1% large caps. It is a more diversified fund internally than its brethren, with just 10% of its holdings held in its top 10 stocks. It is also a cheaper fund, in terms of the price-to-book and price-to-earnings ratios of its components, than VONG.

VONG, meanwhile, is 87% large caps, 11% mid caps, and 2% small caps in its portfolio, with 61% of its assets dedicated to its 10 largest positions. While its portfolio is slightly richer on the P/S and P/.E basis, it’s not too far removed from VBK to be a concern.

The real difference is in performance. Small caps are having one of their best runs since 1991, finally showing the outperformance they theoretically should provide compared to large caps. VBK is up 21.1% year-to-date compared to 5.3% for VONG. It has returned 17.5%, 5.4%, and 12.2% annualized in the 3-year, 5-year, and 10-year time frames.

Those all lag VONG, which has delivered returns of 22.5%, 13.7%, and 18.5% over the 3-, 5-, and 10-year time frames, respectively.

So which is the better buy? On pure long-term returns, which is a good way to judge a fund, VONG is the clear winner. But there is a lot to be said for VBK’s recent performance perhaps heralding a return by the market to investing more in small caps. A well-balanced portfolio should have stocks of various capitalization groupings to balance out returns over time. Considering the likelihood of which ETF will close out 2026 better, VBK gets the nod.

For more guidance on ETF investing, check out the full guide at this link.

Brendan Coffey has positions in Vanguard Scottsdale Funds - Vanguard Russell 1000 Growth ETF. The Motley Fool has positions in and recommends Apple, Ciena, Microsoft, Nvidia, Rocket Lab, and Vanguard Index Funds - Vanguard Small-Cap Growth ETF. The Motley Fool recommends Astera Labs. The Motley Fool has a disclosure policy.