iShares Russell 2000 Growth ETF

IWO

Market cap $14.7B

From small-cap volatility to mega-cap stability, these two ETFs highlight the trade-offs between diversification, risk, and income in growth investing.

If you're interested in broad exposure to the Small Cap Growth segment of the US equity market, look no further than the iShares Russell 2000 Growth ETF (IWO), a passively managed exchange traded fund launched on July 24, 2000.

IWO takes on higher fees but delivered a stronger 1-year return and slightly higher yield. MGK focuses on mega-cap tech and communications, while IWO spreads across 1,100+ small-cap growth names with a tilt to healthcare and industrials.

IWO targets small-cap U.S. growth stocks, while QQQ focuses on large-cap technology and communication leaders. IWO has a higher expense ratio and experienced a deeper five-year drawdown, but slightly outperformed QQQ over the past year.

IWO has outperformed VONG over the past year, but with meaningfully higher volatility and a deeper five-year drawdown. VONG charges a much lower expense ratio and holds a smaller, more concentrated portfolio of mega-cap tech stocks.

IWO carries a much higher expense ratio than VOOG but offers a marginally higher dividend yield. VOOG and IWO posted similar one-year returns, but IWO experienced a much steeper five-year drawdown.

IWO charges a higher expense ratio than VUG but both currently yield the same 0.5% IWO outperformed VUG over the past year but experienced a deeper maximum drawdown over five years IWO tilts heavily toward small-cap healthcare, technology, and industrials, while VUG is dominated by mega-cap tech

IWO carries a higher fee but offers a slightly higher dividend yield. IWO targets small-cap growth stocks with a strong healthcare and industrials tilt, while MGK focuses on mega-cap tech giants.

iShares Russell 2000 Growth ETF has a diversified small-cap portfolio with a tilt to fundamental growth and significant exposure in industrials, healthcare, and technology. Over the past decade, IWO has matched its parent index's performance but lags most key small-cap growth ETFs in risk-adjusted returns. Traders prioritizing liquidity may favor IWO, but those seeking lower fees or stronger past performance may prefer VBK, ISCG, or FYC.

IWO has delivered a higher one-year return but experienced a much steeper five-year drawdown than SPY. SPY is more cost-effective and offers a higher dividend yield, while IWO charges higher fees for its small-cap growth focus.