Vanguard S&P 500 Growth ETF vs iShares Russell 2000 Growth ETF: Which Growth Stock Fund Is the Better Buy?
Key Points
Vanguard S&P 500 Growth ETF has a much lower expense ratio of 0.07% compared to 0.24% for iShares Russell 2000 Growth ETF
iShares Russell 2000 Growth ETF has outperformed over the last year but shows a higher maximum drawdown over the five-year period
Vanguard S&P 500 Growth ETF is highly concentrated in the technology sector while iShares Russell 2000 Growth ETF has a more balanced industry mix
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Not all stock ETFs are created equal. The Vanguard S&P 500 Growth ETF (NYSEMKT:VOOG) offers low-cost exposure to established large-cap growth giants, while iShares Russell 2000 Growth ETF (NYSEMKT:IWO) targets the more volatile small-cap growth sector.
Both funds aim to capture capital appreciation by selecting stocks with strong growth characteristics. However, they fish in very different ponds: one focuses on established giants in the S&P 500, while the other focuses on smaller companies. Choosing between them depends on an investor's preference for large-cap stability versus small-cap agility.
Snapshot (cost & size)
| Metric | IWO | VOOG |
|---|---|---|
| Issuer | iShares | Vanguard |
| Expense ratio | 0.24% | 0.07% |
| 1-yr return (as of June 23, 2026) | 39.7% | 27% |
| Dividend yield | 0.40% | 0.50% |
| Beta | 1.17 | 1.17 |
| Assets under management (AUM) | $15.1 billion | $26.5 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. |
The Vanguard fund is significantly more affordable, with an expense ratio of 0.07%, less than one-third of the 0.24% charged by the iShares fund. Payouts are not the primary focus for either, but both maintain a trailing dividend yield below 1%.
Performance & risk comparison
| Metric | IWO | VOOG |
|---|---|---|
| Max drawdown (5 yr) | (40.50%) | (32.70%) |
| Growth of $1,000 over 5 years (total return) | $1,286 | $1,932 |
What's inside
Vanguard S&P 500 Growth ETF holds 146 stocks and is heavily tilted toward technology at 52.3%, followed by communication services at 16.7% and consumer cyclical at 9%. Its largest positions include Nvidia Corp (NASDAQ:NVDA) at 14.3%, Microsoft Corp (NASDAQ:MSFT) at 9.3%, and Apple Inc (NASDAQ:AAPL) at 6.4%. Launched in 2010, the Vanguard fund has paid $0.37 per share over the trailing 12 months.
In contrast, iShares Russell 2000 Growth ETF targets smaller companies, holding 1,102 small-cap stocks. It is more distributed across sectors, including technology at 25.9%, industrials at 23%, and healthcare at 21.9%. Top positions include Bloom Energy (NYSE:BE) at 3.5%, Credo Technology Group Holding (NASDAQ:CRDO) at 2.1%, and Sterling Infrastructure (NASDAQ:STRL) at 1.4%. This iShares fund was launched in 2000 and has a trailing-12-month dividend of $1.64 per share.
Which fund is the better buy?
Both ETFs are stock-focused, but they are very different funds.
The Vanguard S&P 500 Growth ETF comprises large- and mega-cap stocks, compared to the small-cap holdings of the Shares Russell 2000 Growth ETF.
Both are picking growth stocks from the broader indexes they track. This makes them more aggressive funds for people seeking greater returns in an equity ETF.
More sophisticated investors may want to consider if the longer-term underperformance of small-cap stocks has shifted, reflected by IWO’s superior 1-year performance and even more impressive year-to-date performance, of 20% for IWO to 8.7% for VOOG. Theoretically, small-cap stocks should be better growth stocks than the larger and more established S&P 500 cohort.
Practically, however, S&P 500 stocks have been better performers in recent times. The Vanguard VOOG fund has returned nearly 26% over the 3-year period to about 19% for IWO. Long-term, the difference is even more stark. VOOG returned 16% and 18% annualized over the 5-year and 10-year periods, respectively, while IWO returned 1.5% and about 10%.
If market cap considerations don’t matter to you, then the long-term performance of the Vanguard S&P 500 Growth ETF, with its lower cost ratio, makes it the selection among this pair.
For more guidance on ETF investing, check out the full guide at this link.
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Brendan Coffey 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.
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