Better Buy: Vanguard Growth ETF or iShares Russell 1000 Growth ETF? | Smart Change: Personal Finance


As such, while it is predominantly made up of large caps, it also has some mid-cap names. Overall, the portfolio includes about 501 holdings — roughly 75% more than the Vanguard Growth ETF. The Russell 1000 Growth Index includes companies within the Russell 1000 with higher price-to-book ratios and higher forecasted growth values. The average price-to-book ratio is around 14.2% in the Russell 1000 Growth Index, compared to 4.7% in the Russell 1000. The average earnings growth rate over the past five years is 26%.

About 45% of the portfolio is in information technology stocks, while 18% is in consumer discretionary and 13% is in communication stocks. It has the same top three holdings as the Vanguard Growth ETF, and its 10 largest holdings make up 45.5% of the portfolio.

Over the last 10 years, it has returned 19.2% on an annualized basis, and over the past five years it has posted a 24.1% annualized return, as of Aug. 31. Over the past one-year period through Aug. 31 it is up 28.3%, and year to date as of Sept. 24 it has returned roughly 18%. It has an expense ratio of 0.19%.

Which is the better buy?

These are two of the largest large-cap growth funds and, while they track different indexes, they are very similar in terms of performance. The returns are almost equal over both the long term and the short term. While the iShares fund is more diversified and is slightly less volatile as measured by its beta and standard deviation numbers, the difference is minor.