Vanguard Russell 1000 Growth ETF (NASDAQ:VONG) offers heavy concentration in mega-cap technology leaders, while Vanguard Morningstar Small-Cap Growth ETF (NYSEMKT:VBK) provides a diversified mix of smaller growth companies at a slightly lower expense.
Investors often compare VONG and VBK when deciding between large-cap stability and small-cap growth potential. While both Vanguard funds target growth-oriented equities, the Russell 1000 fund tracks established American corporations, whereas the small-cap fund focuses on the next generation of businesses, leading to distinct risk profiles and sector weights.
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 as of the close of trading on July 30.
The small-cap fund is the more affordable option with a 0.05% expense ratio, though VONG is nearly as efficient at 0.06%. While yield is rarely the focus for growth investors, VONG currently offers a slightly higher trailing payout.
Performance & risk comparison
What’s inside
Vanguard Russell 1000 Growth ETF is heavily weighted toward technology, representing 54% of its assets under management (AUM), followed by communication services at 16% and industrials at 9%. The fund contains 369 holdings, and its largest positions include Nvidia Corp (NASDAQ:NVDA) at 13.80%, Apple Inc (NASDAQ:AAPL) at 6.7%, and Alphabet Inc (NASDAQ:GOOGL) at 6.2%. It was launched in 2010. Vanguard Russell 1000 Growth ETF has paid $0.58 per share over the trailing 12 months, which on its recent ~$120.90 share price works out to a 0.5% yield.
Vanguard Morningstar Small-Cap Growth ETF offers more balance across technology at 27%, industrials at 23%, and healthcare at 18%. The fund holds 579 stocks, and its largest positions include Credo Technology Group Holding Ltd (NASDAQ:CRDO) at 1.2%, Revolution Medicines Inc (NASDAQ:RVMD) at 1%, and Astera Labs Inc (NASDAQ:ALAB) at 1%. It was launched in 2004. Vanguard Morningstar Small-Cap Growth ETF has paid $1.53 per share over the trailing 12 months, which on its recent ~$341.38 share price works out to a 0.4% yield.
Which fund is the better buy?
Both of these Vanguard funds invest in U.S.-listed stocks that have a growth profile. There are some differences to consider, however.
Vanguard’s VBK, the Small Cap Growth ETF, is largely dedicated to small-cap equities, with some 59% of its holdings classified as small caps, plus 38% as mid caps, and the remainder in large cap equities. It is more diversified internally than its brethren, with just 9% of its holdings in its top 10 stocks. It is also a cheaper fund, in terms of the price-to-book and price-to-earnings ratios of its components, than VONG.
VONG, meanwhile, is 86% weighted to large caps, followed by 12% in mid caps, and the remainder of its portfolio in small caps. About 54% of its portfolio is dedicated to its 10 largest positions. While its portfolio is slightly richer on the P/S and P/E basis, it’s not too far removed from VBK to be a concern.
The real difference is in performance. Small caps are having one of their best runs since 1991, finally showing the outperformance they should theoretically provide relative to large caps. VBK is up 21% year-to-date compared to just a slight, 0.3%, gain for VONG. VBK has returned 17.5%, 5.4%, and 12.2% annualized in the 3-year, 5-year, and 10-year time frames.
Those all lag VONG, which has delivered returns of 19.2%, 11.8%, and 17.4% over the 3-, 5-, and 10-year time frames, respectively.
So which is the better buy? On pure long-term returns, which is a good way to judge a fund, VONG is the clear winner. But there is a lot to be said for VBK’s recent performance, perhaps heralding a return by the market to favoring the growth prospects of small caps. A well-balanced portfolio should have stocks across various capitalization groups to balance returns over time. Considering the likelihood of which ETF will close out 2026 better, VBK appears to eb the better buy for 2026.
For more guidance on ETF investing, check out the full guide at this link.
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Brendan Coffey has positions in Vanguard Scottsdale Funds – Vanguard Russell 1000 Growth ETF. The Motley Fool has positions in and recommends Alphabet, Apple, Nvidia, and Vanguard Index Funds – Vanguard Small-Cap Growth ETF. The Motley Fool recommends Astera Labs. The Motley Fool has a disclosure policy.
Vanguard VONG vs VBK: Is a Small Cap ETF the Better Buy Over a Large Cap Fund in 2026? was originally published by The Motley Fool
