Which Growth Stock ETF is Better: Vanguard's VONG or iShares' IWO?

Core Viewpoint - The comparison between Vanguard Russell 1000 Growth ETF (VONG) and iShares Russell 2000 Growth ETF (IWO) highlights their differing focuses on large-cap and small-cap stocks, respectively, which leads to variations in cost, risk, and sector exposure [1][2]. Cost and Size - VONG has an expense ratio of 0.07% and assets under management (AUM) of $44.6 billion, while IWO has a higher expense ratio of 0.24% and AUM of $13.2 billion [3]. - The one-year return for VONG is 14.4%, compared to IWO's 10.6%, and VONG has a dividend yield of 0.5%, slightly lower than IWO's 0.7% [3][4]. Performance and Risk Comparison - Over the past five years, VONG experienced a maximum drawdown of -32.71%, while IWO faced a larger drawdown of -42.01% [5]. - An investment of $1,000 in VONG would have grown to $2,064 over five years, whereas the same investment in IWO would have grown to $1,235 [5]. Sector Exposure - IWO targets over 1,000 small-cap growth stocks, with significant allocations in technology (25%), healthcare (22%), and industrials (21%), reflecting a diversified approach [6]. - VONG is heavily concentrated in large-cap technology, with over 50% of its assets in this sector, including major holdings in Nvidia, Apple, and Microsoft [7]. Historical Performance - Since 2010, VONG has delivered total returns exceeding 1,000%, while IWO's returns are at 408%, with the S&P 500 rising nearly 700% in the same period [8]. - VONG's concentration in a few large-cap stocks, referred to as the "Magnificent Seven," accounts for 59% of its assets, raising concerns about its performance if these stocks underperform [9]. Valuation Metrics - IWO has a price-to-earnings (P/E) ratio of 24, which is significantly lower than VONG's P/E ratio of 39, indicating more reasonable valuations for small-cap stocks [10].