VONG vs. IWO: Vanguard Russell 1000 Growth ETF Has Outperformed iShares Rival

First, let’s examine VONG. This fund has massive exposure to big tech giants like Apple, Nvidia, and Microsoft. Consequently, VONG’s performance tends to replicate what an investor might achieve with a broad-based ETF tracking the S&P 500. Indeed, VONG has delivered a total return of 102% over the last five years, slightly better than the S&P 500’s 91% return over the same period. VONG has delivered a compound annual growth rate (CAGR) of 15.2%, also slightly better than the S&P 500’s 13.8%. Finally, the fund boasts a very low expense ratio of only 0.06%.

Turning to IWO, this fund tracks the small-cap segment within the Russell 2000. Yet, since small-caps have underperformed tech mega-caps, overall performance has been weaker in recent years. The fund has generated a total return of 32% over the last five years, equating to a CAGR of 5.7%. That’s significantly below what both the S&P 500 and VONG have delivered over the same period.

As for similarities, both funds have a modest dividend yield of 0.4%. In addition, both funds have over $10 billion in AUM, suggesting liquidity should not be an issue.

In summary, for most investors, VONG will be the more appealing fund, due to its lower expense ratio and superior performance history. However, given that VONG is very similar to the S&P 500, some investors may favor IWO to diversify their portfolios.

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Jake Lerch has positions in Nvidia. The Motley Fool has positions in and recommends Apple, Bloom Energy, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

VONG vs. IWO: Vanguard Russell 1000 Growth ETF Has Outperformed iShares Rival was originally published by The Motley Fool