VUG vs. IWO: Can This Small-Cap ETF Keep Outperforming Major Growth Stocks?

Yahoo Finance ·

Which stocks do you think are delivering the biggest gains right now: the major tech stocks that are driving the artificial intelligence (AI) boom, or smaller companies that most people might not know by name? The answer might surprise you: Small-cap stocks have been on a hot streak. The Vanguard Growth ETF ( VUG +0.13% ) focuses on large-cap growth stocks. Its portfolio is heavily weighted toward the tech sector and household-name tech companies . Although this fund has a strong track record, in the past year it's been strongly outperformed by the iShares Russell 2000 Growth ETF ( IWO 0.79% ) , which holds more than 1,100 small-cap growth stocks. The small-cap ETF has delivered almost 2-to-1 returns compared with the large-cap ETF. There's no guarantee that this trend will continue, but recent research suggests that small-cap stocks could have staying power. Let's look at these two growth stock ETFs and see whether the iShares small-cap growth ETF could be a better choice for the future.

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