Which Small-Cap Growth ETF Is the Better Buy: State Street's SLYG or Invesco's RZG?
Key Points
The State Street SPDR S&P 600 Small Cap Growth ETF (SLYG) has a lower expense ratio than the Invesco S&P SmallCap 600 Pure Growth ETF (RZG).
RZG boasts higher one-year returns, but also experienced a significantly larger maximum drawdown over the last five years.
RZG concentrates most heavily in healthcare, while SLYG's largest sector weightings are industrials and technology.
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The State Street SPDR S&P 600 Small Cap Growth ETF (NYSEMKT:SLYG) and the Invesco S&P SmallCap 600 Revenue ETF (NYSEMKT:RZG) both focus on smaller U.S. companies with room to grow, but the two funds take very different approaches. SLYG tracks a conventional small-cap growth index, while RZG follows a "pure growth" benchmark that screens for only the strongest growth characteristics, resulting in a much narrower portfolio.
Snapshot (cost & size)
| Metric | SLYG | RZG |
|---|---|---|
| Issuer | State Street | Invesco |
| Expense ratio | 0.15% | 0.35% |
| 1-yr return (as of Aug. 24, 2026) | 23.39% | 26.73% |
| Dividend yield | 0.66% | 0.44% |
| Beta | 1.08 | 1.05 |
| AUM | $5.1 billion | $138.7 million |
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.
SLYG is significantly cheaper, with an expense ratio of 0.15% compared to RZG's 0.35%. Income-seeking investors may also prefer SLYG's higher yield of 0.66% to RZG's 0.44%.
Performance & risk comparison
| Metric | SLYG | RZG |
|---|---|---|
| Max drawdown (5 yr) | (29.17%) | (38.33%) |
| Growth of $1,000 over 5 years (total return) | $1,370 | $1,317 |
What's inside
Launched in 2006, RZG allocates its portfolio across 127 holdings. Its heaviest sector weightings are in healthcare at 22.7%, industrials at 16.6%, and financial services at 16.1%. Its largest positions include ACM Research (NASDAQ:ACMR) at 2.40%, Dave (NASDAQ:DAVE) at 1.9%, and Protagonist Therapeutics (NASDAQ:PTGX) at 1.8%.
SLYG provides broader diversification with 351 holdings. Its sector exposure leans most heavily toward industrials at 19%, technology at 16.9%, and healthcare at 15.2%. Top holdings include Corcept Therapeutics (NASDAQ:CORT) at 1.2%, Viasat (NASDAQ:VSAT) at 1.2%, and Brinker International (NYSE:EAT) at 1%. SLYG was launched in 2000.
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Which looks like the better buy
Small-cap growth is one of the most volatile corners of the U.S. market, and the differences between these two funds are wider than their similar names suggest.
RZG's "pure growth" screen leaves it with roughly a third as many holdings as SLYG and a much heavier tilt toward healthcare -- a sector packed with small biotechs whose shares can swing hard on a single trial result. That concentration helps explain both RZG's stronger one-year return and its much deeper five-year maximum drawdown. It's a familiar pattern: narrower funds tend to win big when investors are chasing risk and fall harder when sentiment turns.
SLYG is the more conventional fund. With 351 holdings, roughly $5 billion in assets, and a 0.15% expense ratio, it works better as a core building block. SLYG's 0.2-percentage-point fee advantage may sound trivial, but it has the potential to compound meaningfully over many years.
Anyone looking for broad, low-cost exposure to smaller U.S. companies will likely find SLYG's diversification the better fit. Investors deliberately betting on the fastest-growing small caps -- and willing to stomach sharper drops in pursuit of higher returns -- may decide RZG's concentration is worth the trade-off.
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Andy Gould has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Corcept Therapeutics. The Motley Fool recommends Protagonist Therapeutics. The Motley Fool has a disclosure policy.
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