Key Points

Vanguard Mega Cap Growth ETF (MGK) features a notably reduced expense ratio compared to iShares Russell 2000 Growth ETF (IWO).
IWO posted stronger total returns over the past 12 months yet showed greater price swings.
MGK centers on large technology leaders, whereas IWO targets smaller firms with elevated growth prospects.
10 stocks we prefer over iShares Trust - iShares Russell 2000 Growth ETF

The Vanguard Mega Cap Growth ETF (NYSEMKT:MGK) delivers affordable access to major established firms, whereas the iShares Russell 2000 Growth ETF (NYSEMKT:IWO) presents a higher-cost route toward promising smaller enterprises.

Investors seeking growth frequently weigh the steady earnings power of large companies against the agile expansion prospects of smaller ones. This review compares the returns, fees, and holdings of two well-known ETFs that represent these different areas of the market.

Snapshot (cost and size)

Metric	MGK	IWO
Issuer	Vanguard	iShares
Expense ratio	0.05%	0.24%
1-year return (as of June 12, 2026)	23.04%	36.25%
Dividend yield	0.31%	0.40%
Beta	1.23	1.46
AUM	$35.0 billion	$14.7 billion

Beta tracks price movement against the S&P 500 and draws from five-year monthly data. The 1-year return covers total performance over the prior 12 months. Dividend yield reflects the trailing-12-month payout rate.

MGK stands out as the lower-cost choice for extended holding periods thanks to its 0.05% expense ratio versus IWO at 0.24%. IWO offers a modestly higher dividend yield of 0.40% against MGK at 0.31%.

Performance and risk comparison

Metric	MGK	IWO
Max drawdown (5 yr)	(36.02%)	(42.02%)
Growth of $1,000 over 5 years (total return)	$1,951	$1,239

What is inside

The iShares Russell 2000 Growth ETF (NYSEMKT:IWO) focuses on smaller companies with robust growth traits and includes over 1,000 holdings. Leading sector weights are Technology at 26%, Industrials at 23%, and Healthcare at 22%. Top positions feature Bloom Energy Class A (NYSE:BE) at 3.5%, Credo Technology Group (NASDAQ:CRDO) at 2.1%, and Sterling Infrastructure (NASDAQ:STRL) at 1.4%. The ETF began in 2000 and distributes a 0.40% yield.

The Vanguard Mega Cap Growth ETF (NYSEMKT:MGK) covers 59 large-scale holdings and follows the CRSP U.S. Mega Cap Growth Index. Major sector allocations include Technology at 56%, Communication Services at 18%, and Consumer Cyclical at 13%. Leading holdings consist of Nvidia (NASDAQ:NVDA) at 13.8%, Apple (NASDAQ:AAPL) at 11.8%, and Microsoft (NASDAQ:MSFT) at 8.7%. The fund started in 2007 and yields 0.31%.

What This Means for Investors

Selecting between MGK and IWO hinges on personal tolerance for swings and expectations for where growth will emerge next.

MGK centers on firms that have shaped the recent market advance, including Nvidia, Apple, and Microsoft. These entities hold strong competitive edges, substantial cash reserves, and capacity to fund AI infrastructure projects that propel the technology sector. With fees at just 0.05% annually, investors gain access to this expansion narrative at minimal cost, which benefits those pursuing long-term holdings. The main drawback lies in concentration, as more than half the assets sit in technology and thus face shifts in sector sentiment.

IWO represents a wager on smaller enterprises that may possess greater expansion headroom. Small-cap growth names often react more to economic conditions, rising sharply in favorable settings and declining sharply amid rising uncertainty. Although it carries meaningful technology exposure, heavier allocations to industrials and healthcare create a distinct performance pattern from MGK. Investors convinced that agile, lesser-known companies will lead gains ahead may find IWO suitable. They should note the 0.24% expense ratio and elevated beta, which mean paying more for added risk.

Most long-term investors will likely favor the simpler, lower-cost, and steadier MGK option, especially those seeking technology-led AI exposure as a portfolio foundation. IWO could suit those with extended horizons, greater risk appetite, and a clear view on small-cap strength.

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Andy Gould holds positions in Apple, Nvidia, and Sterling Infrastructure along with these options: long January 2027 $125 calls on Nvidia and short January 2027 $125 puts on Nvidia. The Motley Fool holds positions in and recommends Apple, Bloom Energy, Microsoft, Nvidia, and Sterling Infrastructure. The Motley Fool maintains a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.