Better Growth Stock ETF: Vanguard's Large-Cap VUG vs. Invesco's Small-Cap RZG

The Vanguard Morningstar Growth ETF (NYSEMKT:VUG) provides ultra-low-cost exposure to domestic large-cap growth stocks, whereas the Invesco S&P SmallCap 600 Revenue ETF (NYSEMKT:RZG) targets small-cap growth companies by weighting them according to a growth score that incorporates metrics such as revenue.

This comparison looks at two very different ways to capture market momentum. The Vanguard Morningstar Growth ETF tracks the performance of the CRSP U.S. Large Cap Growth Index, focusing on established leaders. In contrast, the Invesco S&P SmallCap 600 Revenue ETF screens for growth while weighting constituents based on top-line results.

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-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

Cost-conscious investors may find the Vanguard fund more affordable, as it carries an expense ratio of 0.03% versus 0.35% for the Invesco fund. The dividend yield gap is minimal, with the two funds recently paying 0.4% and 0.5%.

Growth of $1,000 over 5 years (total return)

The Vanguard Morningstar Growth ETF tracks the CRSP U.S. Large Cap Growth Index, employing a full-replication strategy to capture the performance of American growth giants. It maintains a concentrated portfolio where top holdings include Nvidia (NASDAQ:NVDA) at 12.81%, Apple (NASDAQ:AAPL) at 12.60%, and Microsoft (NASDAQ:MSFT) at 9.59%. This tech-heavy fund allocates 56% to technology, 15% to communication services, and 12% to consumer cyclical companies across 166 holdings. The Vanguard fund launched in 2004, and has paid $0.34 per share over the trailing 12 months, which on its recent ~$88.90 share price works out to a 0.4% yield.

The Invesco S&P SmallCap 600 Revenue ETF provides exposure to the growth subset of the S&P SmallCap 600 Index, but it weights its 127 holdings by a growth score rather than market cap. The portfolio is most heavily weighted toward healthcare at 23%, industrials at 17%, and financial services at 16%. Its largest positions include ACM Research (NASDAQ:ACMR) at 2.43%, Protagonist Therapeutics (NASDAQ:PTGX) at 1.95%, and Acadian Asset Management (NYSE:AAMI) at 1.89%. The Invesco fund launched in 2006, and has paid $0.30 per share over the trailing 12 months, which on its recent ~$68.51 share price works out to a 0.5% yield.