Is the Vanguard S&P 500 Growth ETF or iShares Small-Cap 600 Growth ETF the Better Fund in 2026?
2026-07-25 17:27
•Brendan Coffey •The Motley Fool
•• ••••• Axe Capital view
S&P 500 Growth vs Small-Cap Growth: Which ETF for 2026?
Comparing Vanguard's large-cap tech growth fund to iShares' broader small-cap growth play for South African investors.
The battle between VOOG and IJT isn’t just a US story—it matters for JSE investors through the rand’s sensitivity to global tech and growth sentiment. VOOG leans heavily on mega-cap tech giants like Nvidia, Microsoft, and Apple, offering stellar long-term returns (14.5% annualised over 5 years) and very low fees. This appeals if you’re banking on continued tech dominance, which could benefit South African tech-related counters or Prosus exposure indirectly. IJT, however, provides diversification across smaller firms, mostly outside tech, with steadier short-term performance and a bit less volatility. That might suit investors wary of tech’s rollercoaster, but its higher fees and lower long-term returns make it a less compelling core holding. The question is how durable tech’s edge remains and if small caps can leapfrog with a US growth revival. Watch USD/ZAR closely—tech selloffs often hit the rand hard. I favour VOOG for longer horizons but IJT deserves a watch-and-wait stance. this is just my opinion and not financial advice
Buy VOOG for exposure to dominant global tech driving rand-sensitive growth. Keep IJT on your radar, but trim until it proves longer-term muscle. Allocate with rand volatility in mind.
- VOOG
- IJT
- USD/ZAR
- Prosus
- Tech sector downturn weakening VOOG and USD/ZAR
- US small-cap growth losing momentum affecting IJT returns
6/10
The article compares two growth-focused ETFs: Vanguard S&P 500 Growth ETF (VOOG), which focuses on large-cap tech stocks with lower fees, and iShares S&P Small-Cap 600 Growth ETF (IJT), which offers broader diversification across smaller companies. VOOG delivers superior long-term performance with 14.5% annualized 5-year returns versus IJT's 7.2%, though IJT has outperformed recently with 27% year-to-date gains. VOOG is recommended for long-term investors seeking stronger returns, while IJT offers lower volatility and better diversification.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Brendan Coffey
Categories: Healthcare, Equities
Tickers: VOOG, IJT, AAPL, MSFT, NVDA
Sentiment: Positive - Superior 5-year annualized returns of 14.5%, lower expense ratio of 0.07%, and recommended as the better choice for long-term investors. Strong performance driven by large-cap tech holdings. Outperformed on 1-year basis with 26.3% returns and 27% year-to-date gains. Offers better diversification across industrials and healthcare with lower volatility (max drawdown of 29.2% vs 32.7%), though higher expense ratio of 0.18%.
Keywords: growth ETF, large-cap vs small-cap, expense ratio, technology sector, diversification, long-term performance, volatility
Insights:
- VOOG: Positive: Superior 5-year annualized returns of 14.5%, lower expense ratio of 0.07%, and recommended as the better choice for long-term investors. Strong performance driven by large-cap tech holdings.
- IJT: Positive: Outperformed on 1-year basis with 26.3% returns and 27% year-to-date gains. Offers better diversification across industrials and healthcare with lower volatility (max drawdown of 29.2% vs 32.7%), though higher expense ratio of 0.18%.
- AAPL: Neutral: Mentioned as a top holding in VOOG at 6% of the fund, representing exposure to large-cap tech growth.