Small-cap growth stocks are highly volatile and move quickly. Below we'll check out the 5 best small cap growth ETFs for 2023.
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In a hurry? Here's the list:
- VBK – Vanguard Small Cap Growth ETF
- IWO – iShares Russell 2000 Growth ETF
- VTWG – Vanguard Russell 2000 Growth ETF
- ISCG – iShares Morningstar Small-Cap Growth ETF
- VIOG – Vanguard S&P Small-Cap 600 Growth ETF
Introduction – Why Small Cap Growth Stocks?
There are only a small handful of small cap growth ETFs available. I prefer small cap value for holding long-term, as small cap growth stocks don't tend to pay a risk premium. However, small cap growth stocks are highly volatile and move quickly, so trading on trends and earnings announcements may be better done within the small cap growth universe.
Below are the best small cap growth ETFs.
The 5 Best Small Cap Growth ETFs
Below are the 5 best small cap growth ETFs.
VBK – Vanguard Small Cap Growth ETF
VBK from Vanguard is the most popular small cap growth ETF, and for good reason. The fund has over $14 billion in assets and a low fee of 0.07%. It seeks to track the MSCI US Small Cap Growth Index.
IWO – iShares Russell 2000 Growth ETF
IWO from iShares seeks to track the Russell 2000 Growth Index. The fund has over 1,100 holdings, roughly twice that of VBK above, but with a higher expense ratio of 0.24%. IWO also has great liquidity with over $11 billion in assets.
VTWG – Vanguard Russell 2000 Growth ETF
VTWG tracks the same index as IWO but at a much lower cost of only 15 basis points. The tradeoff is much lower AUM (only about $700M) and volume, so while VTWG is likely a better long-term play than IWO, day traders will appreciate the greater liquidity of IWO.
ISCG – iShares Morningstar Small-Cap Growth ETF
iShares recently slashed its fees on some popular ETFs. ISCG captures smaller, more growth-y stocks than VBK above at a lower price of 0.06%. It would definitely be my choice out of the funds on this list. This fund has nearly $500 billion in assets, and I'd expect that to keep climbing.
VIOG – Vanguard S&P Small-Cap 600 Growth ETF
VIOG seeks to track the S&P Small Cap 600 Growth Index. This index screens for earnings, but that ends up tilting it away from Growth toward Value, making it closer to a small cap blend fund. In any case, it still captures smaller stocks than VBK. This fund has an expense ratio of 0.16%.
Where to Buy These Small Cap Growth ETFs
All these small cap growth ETFs should be available at any major broker. My choice is M1 Finance. M1 has zero trade commissions and zero account fees, and offers fractional shares, dynamic rebalancing, and a sleek, user-friendly interface and mobile app. I wrote a comprehensive review of M1 Finance here.
Interested in more Lazy Portfolios? See the full list here.
Disclaimer: While I love diving into investing-related data and playing around with backtests, this is not financial advice, investing advice, or tax advice. The information on this website is for informational, educational, and entertainment purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here.
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