Vanguard S&P 500 Growth ETF vs. Vanguard Small-Cap Growth ETF: The AI Boom Has Created a Major Divide
Key Points
Vanguard S&P 500 Growth ETF concentrates heavily in technology accounting for nearly one-third of its portfolio.
Vanguard Morningstar Small-Cap Growth ETF holds 551 companies across a more balanced mix of technology, healthcare, and industrials.
The small-cap fund offers a slightly lower 0.05% expense ratio, but its smaller, less established companies presents unique risks.
The Vanguard S&P 500 Growth ETF (NYSEMKT:VOOG) tracks large-cap growth stocks, while the Vanguard Morningstar Small-Cap Growth ETF (NYSEMKT:VBK) targets smaller, faster-moving companies, resulting in different risk profiles and historical return outcomes.
Investors seeking long-term capital appreciation often gravitate toward growth-oriented funds, but the size of the companies within those funds makes a material difference. While large-caps offer established business models, small-caps can provide potential for more explosive gains. This comparison highlights how market cap focus shifts the sector concentrations of these two vehicles.
Snapshot (cost & size)
| Metric | VBK | VOOG |
|---|---|---|
| Issuer | Vanguard | Vanguard |
| Share price | $329.06 (as of 2026-11-02) | $79.98 (as of 2026-11-02) |
| Expense ratio | 0.05% | 0.07% |
| 1-yr return (as of Nov. 2, 2026) | 8.8% | 7.1% |
| Dividend yield | 0.42% | 0.38% |
| Beta | 1.19 | 1.17 |
| AUM | $22.4B | $26.3B |
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.
Vanguard Morningstar Small-Cap Growth ETF is slightly more affordable with a 0.05% expense ratio compared to the 0.07% charged by Vanguard S&P 500 Growth ETF. Because both funds follow passive indexing strategies, management fees remain well below industry averages. Yields for both funds remain under 1%, which is typical for growth-focused portfolios.
Performance & risk comparison
| Metric | VBK | VOOG |
|---|---|---|
| Max drawdown (5 yr) | (38.4%) | (32.7%) |
| Growth of $1,000 over 5 years (total return) | $1,116 | $1,692 |
What's inside
Vanguard S&P 500 Growth ETF provides heavy exposure to the largest growth engines in the U.S. economy, with Technology making up 54% of its weight. Its 152 holdings include massive stakes in NVIDIA Corp. (NASDAQ:NVDA) at 14.99%, Microsoft Corp. (NASDAQ:MSFT) at 10.34%, and Apple, Inc. (NASDAQ:AAPL) at 6.60%. This concentration in the tech sector has historically influenced its volatility. The fund was launched in 2010 and has paid $0.39 per share over the trailing 12 months, which on its recent ~$80 share price works out to a 0.38% yield.
Vanguard Morningstar Small-Cap Growth ETF diversifies across 551 smaller companies. Its sector allocation is more balanced than its large-cap counterpart, with Technology at 29%, Healthcare at 21%, and Industrials at 20%. Its largest positions include Natera, Inc. (NASDAQ:NTRA) at 1.62%, Twilio, Inc. (NYSE:TWLO) at 1.28%, and Revolution Medicines, Inc.(NASDAQ:RVMD) at 1.19%. This broader diversification helps mitigate the impact of individual stock fluctuations within the small-cap space. The fund was launched in 2004 and has paid $1.40 per share over the trailing 12 months, which on its recent ~$329 share price works out to a 0.42% yield.
For more guidance on ETF investing, check out the full guide at this link.
Which looks like the better buy
The Vanguard Morningstar Small-Cap Growth ETF presents an attractive case. After years of lagging behind larger companies, small-cap stocks have staged a meaningful recovery in 2026, supported by improving earnings expectations and relatively attractive valuations. Historically, smaller companies have benefited from periods of declining interest rates and broadening economic growth. However, with the Federal Reserve maintaining a cautious stance on inflation, borrowing costs could remain elevated, presenting challenges for businesses that rely more heavily on external financing.
The Vanguard S&P 500 Growth ETF offers a more established approach. Its substantial exposure to Big Tech provides access to companies with strong cash flows, competitive advantages, and significant exposure to the artificial intelligence (AI) infrastructure buildout. However, this does come with risks as a heavy concentration in technology also leaves the fund vulnerable to valuation corrections if AI-related investments fail to generate expected returns.
For investors looking to hold the for the long-term, Vanguard S&P 500 Growth ETF looks like the better buy. Small caps could outperform if borrowing costs decline and economic growth broadens, but the large-cap fund's established profitability and stronger financial resources provide a more compelling balance of growth potential and risk in the current environment.
RJ Fulton has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, Natera, Nvidia, Twilio, and Vanguard Morningstar Small-Cap Growth ETF. The Motley Fool has a disclosure policy.