The Vanguard Russell 1000 Growth ETF (VONG +0.01%) and the Vanguard Growth ETF (VUG +0.00%) are both designed for investors seeking exposure to large-cap U.S. growth stocks, but they track different indexes and show subtle differences in sector allocations and portfolio breadth.

This comparison looks at how each fund stacks up on costs, returns, risk, and portfolio makeup to help clarify which may appeal more to growth-focused investors.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.

VUG is slightly more affordable with a lower expense ratio, while VONG offers a marginally higher dividend yield. Investors focused on reducing fees may lean toward VUG, while VONG offers a very slight edge for income investors.

Performance & risk comparison

What's inside

VONG tracks the Russell 1000 Growth Index and holds 391 stocks, with a strong tilt toward technology (55% of total assets), followed by consumer cyclical (13%) and communication services (12%). Its top positions are Nvidia, Apple, and Microsoft, each making up more than 10% of the fund's total assets.

VUG, by contrast, tracks the CRSP US Large Cap Growth Index and holds 160 stocks. Its sector exposure is also tech-heavy (53%), with allocations of 14% each to communication services and consumer cyclical sectors, and its largest holdings match VONG's. Neither fund exhibits unusual quirks or ESG overlays.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investors

VONG and VUG are similar funds in many ways. They both include large-cap growth stocks, share the same top holdings, and offer very similar expense ratios and dividend yields.

Performance-wise, they're also nearly identical. VUG has slightly outperformed VONG over the last 12 months, yet it's underperformed over the last five years. That said, the difference in performance between these two funds is marginal.

Diversification is perhaps the most important factor separating these ETFs. VUG contains far fewer stocks than VONG, with 160 holdings compared to 391. This can be both an advantage and a risk, depending on how the market is faring.

Greater diversification can help limit risk, especially during periods of volatility. With more than twice as many stocks, VONG has the edge here. However, having more stocks also increases the chances that lower performers will dilute the fund's earnings.

Because VUG is more targeted with fewer holdings, it's more likely to outperform if those stocks succeed. But with a slightly higher beta and steeper max drawdown, VUG also has a history of more significant price volatility.

Both of these ETFs can be fantastic choices for growth-focused investors. With its greater diversification, VONG has a slight edge in periods of economic instability. However, investors seeking a more targeted approach may appreciate VUG's smaller portfolio.

Glossary

ETF: Exchange-traded fund; a basket of securities traded on an exchange like a stock.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges its investors.
Dividend yield: Annual dividends paid by a fund divided by its current share price, shown as a percentage.
Beta: A measure of an investment's volatility compared to the overall market, typically the S&P 500.
Assets under management (AUM): The total market value of all assets a fund manages for investors.
Max drawdown: The largest observed percentage drop from a fund's peak value to its lowest point over a period.
Sector allocation: The percentage of a fund's assets invested in different segments of the economy, like technology or healthcare.
Index: A benchmark that tracks the performance of a group of securities, which funds may use to guide their investments.
Portfolio concentration: The degree to which a fund's assets are invested in a small number of holdings.
Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.