iShares S&P 500 ETF vs. Russell 2000 Growth: Is Large-Cap Stability or Small-Cap Growth the Better Buy?
Key Points
iShares Core S&P 500 ETF (IVV) offers much more affordable ownership costs with a lower expense ratio than the iShares Russell 2000 Growth ETF (IWO).
IWO has delivered a higher one-year total return, but it has historically faced significantly deeper drawdowns than IVV.
IVV maintains a heavier tilt toward technology giants, while IWO is more diversified in its sector mix.
- 10 stocks we like better than iShares Core S&P 500 ETF ›
Choosing between the iShares Russell 2000 Growth ETF (NYSEMKT:IWO) and the iShares Core S&P 500 ETF (NYSEMKT:IVV) involves weighing the high-growth potential of small-cap stocks against the lower costs and relative stability of the 500 largest U.S. companies.
Investors often use IVV as a core portfolio building block, while IWO may appeal to those seeking higher potential returns from smaller, more aggressive companies. Here’s how the two compare on the most important factors.
Snapshot (cost & size)
| Metric | IWO | IVV |
|---|---|---|
| Issuer | iShares | iShares |
| Expense ratio | 0.24% | 0.03% |
| 1-yr return (as of May 14, 2026) | 35.95% | 27.97% |
| Dividend yield | 0.42% | 1.12% |
| Beta (5Y monthly) | 1.46 | 1.00 |
| Assets under management (AUM) | $13.9 billion | $797.5 billion |
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.
IVV offers a much lower expense ratio, charging just 0.03% compared to IWO’s 0.24%. This means investors will pay $3 per year in fees for every $10,000 invested in IVV, or $24 per year for every $10,000 in IWO. IVV also offers a higher dividend yield, which could appeal to investors seeking passive income.
Performance & risk comparison
| Metric | IWO | IVV |
|---|---|---|
| Max drawdown (5 yr) | -42.02% | -24.52% |
| Growth of $1,000 over 5 years (total return) | $1,353 | $1,944 |
What's inside
IVV concentrates on large-cap U.S. equities, holding just over 500 stocks. Technology makes up around 36% of assets, followed by financial services and communication services, and its largest positions include Nvidia, Apple, and Microsoft. The fund has a trailing-12-month dividend of $8.06 per share, and it carries no specific quirks.
In contrast, IWO focuses on smaller growth companies and holds over 1,000 stocks. Industrials, technology, and healthcare round out the top three sectors, each with allocations of around 23%. Its top holdings include Bloom Energy, Credo Technology Group, and Sterling Infrastructure. Over the trailing 12 months, it paid $1.51 per share in dividends. Like its large-cap counterpart, it lists no specific quirks.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
The primary difference between these two ETFs is their target market cap. IVV only contains large-cap stocks, while IWO focuses on small-cap stocks.
In general, small-cap stocks tend to be more volatile in the short term but offer more earning potential. IWO specifically targets small-cap growth stocks, which can lead to both increased volatility and higher returns over time.
IWO has both a higher beta and deeper max drawdown, suggesting more severe price fluctuations over the last five years. While it’s outperformed IVV in 12-month total returns, IVV has come out ahead over the last five years — likely due to tech giants’ staggering growth in that time.
IVV has an edge with its relative stability, offering exposure to 500 of the largest U.S. companies. Its lower expense ratio and higher dividend yield can also help investors save on fees while earning more passive income.
In short, for investors seeking access to large companies with relatively consistent growth, IVV’s exposure to the S&P 500 could be a selling point. On the other hand, if you’re looking to invest in smaller companies that could experience explosive growth over time, IWO’s small-cap focus could make it a strong choice.
Should you buy stock in iShares Core S&P 500 ETF right now?
Before you buy stock in iShares Core S&P 500 ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and iShares Core S&P 500 ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $472,205!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,384,459!*
Now, it’s worth noting Stock Advisor’s total average return is 999% — a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of May 14, 2026.
Katie Brockman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Bloom Energy, Microsoft, Nvidia, and Sterling Infrastructure. The Motley Fool has a disclosure policy.
Recommended Articles
