Key Points

iShares Russell 2000 Growth ETF targets small-cap growth equities while Vanguard Mega Cap Growth ETF concentrates on the biggest firms across the U.S. landscape.
Vanguard's ETF carries a notably lower expense ratio of 0.05 percent compared to 0.24 percent for the iShares fund.
The iShares ETF posted a stronger one-year total return of 40.5 percent yet features a larger historical maximum drawdown of 40.5 percent.
10 stocks we like better than iShares Trust - iShares Russell 2000 Growth ETF

Deciding between Vanguard Mega Cap Growth ETF (NYSEMKT:MGK) and iShares Russell 2000 Growth ETF (NYSEMKT:IWO) comes down to whether an investor prefers the steadiness of major technology leaders or the elevated volatility potential of small caps.

Growth strategies appear in various shapes, from well-known names that lead the S&P 500 to emerging names within the Russell 2000. These two funds deliver separate routes to growth exposure by focusing on opposite sides of the market capitalization range, from reliable global leaders to high-potential smaller firms that could evolve into future leaders.

Snapshot (cost and size)

Metric	MGK	IWO
Issuer	Vanguard	iShares
Expense ratio	0.05%	0.24%
1-yr return (as of June 19, 2026)	26.5%	40.5%
Dividend yield	0.3%	0.4%
Beta	1.23	1.46
AUM	$35 billion	$15.1 billion

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

The Vanguard fund serves as an economical choice for growth-focused investors with an extremely low expense ratio of only 0.05 percent. In contrast the iShares fund carries a higher fee of 0.24 percent. Although both dividend yields stay modest dividends remain secondary to capital gains within these aggressive portfolios since the main objective centers on long-term share price growth.

Performance and risk comparison

Metric	MGK	IWO
Max drawdown (5 yr)	(36%)	(40.5%)
Growth of $1,000 over 5 years (total return)	$1,994	$1,314

What's inside

The iShares ETF seeks to track an index focused on U.S. equities from smaller firms that exhibit strong growth traits. Its leading holdings feature Bloom Energy (NYSE:BE) at 3.42 percent Credo Technology Group (NASDAQ:CRDO) at 2.15 percent and Sterling Infrastructure (NASDAQ:STRL) at 1.43 percent. Introduced in 2000 the fund directs 26 percent to technology 23 percent to industrials and 22 percent to healthcare. It has distributed $1.64 per share in dividends over the trailing 12 months.

The Vanguard ETF meets its goals via a passively managed full-replication method tied to the CRSP US Mega Cap Growth Index delivering access to the largest market participants. Its 59 holdings feature Nvidia (NASDAQ:NVDA) at 13.41 percent Apple (NASDAQ:AAPL) at 12.48 percent and Microsoft (NASDAQ:MSFT) at 8.84 percent. Launched in 2007 the fund leans heavily toward technology at 56 percent communication services at 17 percent and consumer cyclical at 13 percent. It has distributed a trailing-12-month dividend of $0.29.

For additional direction on ETF investing review the complete guide.

What this means for investors

These two ETFs will likely attract quite different types of investors. Vanguard's fund remains inexpensive consistent with the firm's reputation for low-cost products. It is also filled with established technology names. If you have followed prior commentary the direction is clear.

MGK's top five holdings represent roughly 45 percent of the portfolio. That level brings notable concentration risk and all reside in the technology sector. This creates concentration layered on concentration. Moreover these firms pursue aggressive investments in artificial intelligence an area where profitability remains uncertain. The fund appears as a blue-chip technology collection on the surface suggesting safety yet these businesses chase similar objectives and transact goods and services among themselves to advance those aims. From this perspective it forms a cycle of AI investment raising questions about which participants will endure when conditions shift.

IWO carries a higher cost though it stays reasonable. It delivered a stronger one-year return but lags MGK notably over five years. It contains nearly 20 times as many stocks as MGK and no single holding exceeds 4 percent. While not necessarily a purchase recommendation greater diversification supports more comfortable ownership of IWO compared with MGK.

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Erin Kennedy holds positions in Apple. 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.