SLYG vs IJT: Which Small-Cap Growth ETF Wins?

iShares S&P Small-Cap 600 Growth ETF (NASDAQ:IJT) and State Street SPDR S&P 600 Small Cap Growth ETF (NYSEMKT:SLYG) offer nearly identical exposure to small-cap growth, differing primarily in their expense ratios and asset scale.

Small-cap growth stocks are often sought for their potential to deliver significant capital appreciation, though they typically carry higher volatility than their large-cap peers. Both funds target U.S. companies with smaller market capitalizations and strong growth characteristics, such as rising sales and earnings momentum. While they share similar DNA and tracking targets, subtle differences in costs, asset scale, and liquidity may influence which vehicle a small-cap investor chooses for their portfolio.

Snapshot (cost & size)

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.

The State Street fund is slightly more affordable with a 0.15% expense ratio. While the iShares fund has a marginally higher yield, the gap is relatively narrow for growth-oriented investors focused on capital appreciation.

Performance & risk comparison

What's inside

The iShares S&P Small-Cap 600 Growth ETF focuses on U.S. small-caps with robust growth prospects, currently holding 377 stocks in its portfolio. Its sector allocation is led by Industrials at 19%, Technology at 17%, and Healthcare at 15%, providing a diversified look at the smaller end of the market. Its largest positions include Viasat Inc (NASDAQ:VSAT) at 1.31%, Corcept Therapeutics (NASDAQ:CORT) at 1.18%, and Brinker International Inc (NYSE:EAT) at 1.17%. The fund was launched in 2000. iShares S&P Small-Cap 600 Growth ETF has paid $1.21 per share over the trailing 12 months, which on its recent ~$177.38 share price works out to a 0.7% yield.

The State Street SPDR S&P 600 Small Cap Growth ETF mirrors the S&P SmallCap 600 Growth Index, selecting 351 positions based on expansion in sales and earnings momentum. Like its counterpart, it leans heavily into Industrials at 19%, Technology at 17%, and Healthcare at 15%. Top holdings include Viasat Inc at 1.31%, Corcept Therapeutics Inc at 1.18%, and Brinker International Inc at 1.17%. The fund was launched in 2000. State Street SPDR S&P 600 Small Cap Growth ETF has paid $0.76 per share over the trailing 12 months, which on its recent ~$118.35 share price works out to a 0.6% yield.

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

Which looks like the better buy

When comparing these two ETFs, there is not a whole lot of difference. Both of them track the exact same index, the S&P 600 Small Cap Growth Index, so their returns are pretty much the same, as is their holdings and diversification.

Small cap growth stocks have performed well this year as investors have rotated out of large caps into more reasonably valued asset classes with growth potential. Both of these ETFs have posted stellar 26% returns year-to-date and 45% returns over the past year, beating large-caps by a wide margin.

If I had to give a slight edge to one of these small cap growth ETFs, it would be the State Street fund for one major reason. The State Street ETF has a slightly lower expense ratio at 0.15% compared to 0.18% for the iShares ETF. That allows it to pay out a slightly higher total return than the iShares ETF. But the difference is minor. Both are solid options if you are looking to diversify with small cap growth stocks.

Dave Kovaleski 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.