IWY vs. VUG: How Fees and Diversification Set These Popular Growth ETFs Apart

Core Insights - The Vanguard Growth ETF (VUG) and the iShares Russell Top 200 Growth ETF (IWY) provide exposure to large-cap U.S. growth stocks but differ in their index tracking and portfolio construction methods [1][2]. Cost and Size Comparison - VUG has a lower expense ratio of 0.04% compared to IWY's 0.20%, making VUG more cost-effective for investors [3][10]. - As of January 11, 2026, VUG has a one-year return of 20.55% and a dividend yield of 0.41%, while IWY has a one-year return of 19.37% and a dividend yield of 0.36% [3]. - VUG's assets under management (AUM) stand at $352 billion, significantly higher than IWY's $16 billion [3]. Performance and Risk Analysis - Over five years, VUG experienced a maximum drawdown of -35.61%, while IWY had a drawdown of -32.68% [4]. - An investment of $1,000 in VUG would grow to $1,911 over five years, compared to $2,071 for IWY [4]. - Both funds have shown similar performance and volatility levels in recent years [9]. Portfolio Characteristics - IWY consists of 110 holdings, with 55% allocated to technology, 13% to communication services, and 11% to consumer cyclical [5]. - VUG holds 160 stocks, with 51% in technology, 15% in communication services, and 14% in consumer cyclical [6]. - The top three holdings for both funds are Nvidia, Apple, and Microsoft, but they represent a larger portion of IWY's portfolio (38%) compared to VUG's (32%) [8]. Investor Implications - The subtle differences in portfolio concentration and fee structures between VUG and IWY could influence investor decisions based on individual investment strategies and cost considerations [7][10].