Vanguard's VUG vs Invesco's RZG: Two Approaches to US Stock Market Growth

The Vanguard Morningstar Growth ETF (VUG) offers investors exposure to domestic large-cap growth stocks at an ultra-low cost of 0.03%, while the Invesco S&P SmallCap 600 Revenue ETF (RZG) targets small-cap growth companies weighted by a growth score that incorporates metrics such as revenue.

The two ETFs have distinct approaches, with VUG tracking the CRSP U.S. Large Cap Growth Index and RZG using a growth score to identify companies to hold. The Vanguard fund has delivered higher total returns over the last five years but has a max drawdown of 35.6% compared to RZG's 38.3%. In contrast, RZG outperformed in the last year but is more volatile due to its small-cap focus.

The Vanguard Morningstar Growth ETF has top holdings including Nvidia (12.81%), Apple (12.60%), and Microsoft (9.59%), while the Invesco S&P SmallCap 600 Revenue ETF's largest positions include ACM Research, Protagonist Therapeutics, and Acadian Asset Management.