Which Is the Better Small-Cap ETF: Vanguard's VBK or Invesco's RZG?

The Vanguard Small-Cap Growth ETF (NYSEMKT:VBK) and Invesco S&P SmallCap 600 Pure Growth ETF (NYSEMKT:RZG) some people small-cap U.S. maturation stocks, but disagree successful cost, portfolio breadth, and assemblage emphasis.

Both VBK and RZG purpose to seizure the maturation imaginable of U.S. small-cap companies, but they travel chiseled scale strategies and transportation notable differences successful fees, diversification, and trading scale.

This examination highlights wherever each ETF stands out, arsenic good arsenic imaginable frictions for investors seeking vulnerability to small-cap maturation stocks.

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months.

RZG charges a 0.35% disbursal ratio — 0.30 percent points higher than VBK — making VBK the much affordable enactment for cost-conscious investors. VBK besides pays a modestly higher dividend output astatine 0.5%, compared to RZG's 0.4%.

RZG tracks a concentrated handbasket of 130 U.S. small-cap stocks, focusing connected companies with the strongest maturation metrics successful the S&P SmallCap 600 universe. Healthcare is the largest assemblage astatine 23%, followed by exertion and industrials astatine 17% each. Its apical holdings — Powell Industries (NASDAQ:POWL), Argan (NYSE:AGX), and ACM Research (NASDAQ:ACMR) — each marque up little than 2% of assets, and the money has a 20-year way record. The scale is rebalanced annually, and determination are nary leverage oregon ESG screens.

VBK, by comparison, holds a acold broader portfolio with 579 small-cap maturation stocks, spreading hazard crossed exertion (24%), industrials (24%), and healthcare (17%). Top positions see TechnipFMC (NYSE:FTI), Ciena (NYSE:CIEN), and Casey's General Stores (NASDAQ:CASY), each with little than 1% weight. This attack results successful adjacent greater diversification and minimal attraction risk.

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For investors seeking vulnerability to small-cap stocks, the Vanguard Small-Cap Growth ETF (VBK) and Invesco S&P SmallCap 600 Pure Growth ETF (RZG) supply this, but each instrumentality antithetic approaches that tin impact which to put in.

RZG targets high-growth companies arsenic the means for superior appreciation. That’s wherefore it invests successful a finite acceptable of small-cap stocks. It has a meaningfully little AUM, which impacts liquidity, and a acold higher disbursal ratio for a money that is not actively managed. RZG is for investors who question an ETF with the imaginable to outperform, though its caller show is not precise antithetic from VBK’s for a greater cost.