Vanguard VONG vs. iShares IWO: Is Large-Cap or Small-Cap Growth the Better Buy for Investors?
Key Points
VONG offers a significantly lower expense ratio of 0.06% compared to 0.24% for IWO.
IWO has delivered a higher one-year total return, but VONG has outperformed over the last five years.
VONG concentrates on large-cap technology, whereas IWO targets small-cap companies with a focus on healthcare and industrials.
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The Vanguard Russell 1000 Growth ETF (NASDAQ:VONG) and the iShares Russell 2000 Growth ETF (NYSEMKT:IWO) provide targeted exposure to different ends of the market capitalization spectrum.
While IWO seeks growth within the small-cap universe, VONG provides exposure to established U.S. giants. Here’s how the two stack up on the most important factors affecting investors.
Snapshot (cost & size)
| Metric | IWO | VONG |
|---|---|---|
| Issuer | iShares | Vanguard |
| Share price (as of July 30, 2026) | $373.48 | $120.90 |
| Expense ratio | 0.24% | 0.06% |
| 1-yr return (as of July 30, 2026) | 24.77% | 4.13% |
| Dividend yield | 0.42% | 0.45% |
| Beta (5Y monthly) | 1.43 | 1.19 |
| Assets under management (AUM) | $14.4 billion | $53.4 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
VONG is the more affordable option with a significantly lower expense ratio, and although both yields are modest, VONG also offers a slightly higher payout for investors seeking income alongside growth.
Performance & risk comparison
| Metric | IWO | VONG |
|---|---|---|
| Max drawdown (5 yr) | -42.02% | -32.72% |
| Growth of $1,000 over 5 years (total return) | $1,252 | $1,685 |
What’s inside
VONG focuses heavily on technology stocks, with this sector making up around 54% of its portfolio. Communication services and industrials round out its primary sectors, accounting for 16% and 9%, respectively.
It holds 369 stocks, and its top three positions include Nvidia, Apple, and Alphabet. The fund was launched in 2010, and it has paid $0.58 per share in dividends over the trailing 12 months.
IWO provides exposure to small-cap growth, led by healthcare at 29% of assets, technology at 22%, and industrials at 16%. It holds just over 1,100 stocks, and its top three holdings are Brightspring Health Services, Moog, and Krystal Biotech. The fund was launched in 2000 and has paid $1.64 per share in dividends over the trailing 12 months.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
VONG and IWO each provide diversified exposure to their respective market segments. VONG focuses on large-cap stocks with growth potential, while IWO targets small-cap growth stocks.
Smaller stocks are often more vulnerable to short-term volatility, and IWO’s higher beta and steeper max drawdown suggest it’s experienced more severe price fluctuations over the past five years. However, these stocks can also sometimes offer greater growth potential.
This year has been lucrative for small-cap stocks, and IWO’s total returns over the past 12 months are roughly six times greater than VONG’s. Over the last five years, though, VONG has come out ahead.
Both funds can add diversified exposure to your portfolio, and the right choice for you will depend on your goals and risk tolerance. Large-cap growth stocks have outperformed over the last five years, but small-cap growth companies can add variety to a tech-heavy portfolio.
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Katie Brockman has positions in Vanguard Scottsdale Funds - Vanguard Russell 1000 Growth ETF. The Motley Fool has positions in and recommends Alphabet, Apple, Krystal Biotech, Moog, and Nvidia. The Motley Fool has a disclosure policy.
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