Investors choosing between Invesco S&P SmallCap 600 Revenue ETF (NYSEMKT:RZG) and Vanguard S&P 500 Growth ETF (NYSEMKT:VOOG) must weigh the higher historical returns of large-cap growth against the recent momentum of small-cap revenue-weighted stocks.
Both funds target growth, but they look for it in very different corners of the market. While RZG uses a revenue-weighted strategy to filter the small-cap universe, VOOG tracks the growth-oriented subset of the S&P 500, offering a traditional large-cap growth profile.
Snapshot (cost & size)
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 is more affordable, with an expense ratio of 0.07% compared to 0.35% for the Invesco ETF. VOOG also offers a slightly higher trailing-12-month dividend yield.
Performance & risk comparison
What’s inside
The Vanguard ETF provides concentrated exposure to large-cap leaders, with technology making up 53%, communication services at 17%, and consumer cyclical at 9% of the portfolio. Its largest positions include Nvidia (NASDAQ:NVDA) at 14.27%, Microsoft (NASDAQ:MSFT) at 9.3%, and Apple (NASDAQ:AAPL) at 6.37%. The fund holds 146 stocks and was launched in 2010. It has paid $0.37 per share over the trailing 12 months, which on its recent ~$83 share price works out to a 0.50% yield.
Invesco’s fund takes a different path by weighting 125 small-cap stocks by revenue. Sector exposure is more balanced, with healthcare at 23%, technology at 17%, and industrials at 17%. Its largest positions include ACM Research (NASDAQ:ACMR) at 3.29%, Powell Industries (NASDAQ:POWL) at 2.13%, and StoneX Group (NASDAQ:SNEX) at 1.95%. It was launched in 2006. The fund has paid $0.30 per share over the trailing 12 months, which on its recent ~$73 share price works out to a 0.40% yield.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
I think VOOG looks more attractive here. The Vanguard fund has a lower expense ratio, higher dividend yield, and more stocks than the Invesco ETF. I will concede VOOG’s portfolio, despite the greater number of equities, is pretty concentrated. Nvidia, Apple, and Microsoft make up nearly one-third of the fund. In contrast, no position in RZG exceeds 4%. But VOOG has a better long-term return than RZG.
