The comparison between the State Street SPDR S&P 600 Small Cap Growth ETF (SLYG) and the Vanguard Small-Cap Growth ETF (VBK) provides valuable insights for investors looking to gain exposure to U.S. small-cap growth stocks. Both funds target similar market segments but have distinct differences in terms of expense ratios, asset sizes, performance records, and sector allocations.
VBK stands out for its lower expense ratio and significantly larger asset base compared to SLYG. Despite this, VBK has shown a higher 1-year total return, although it has also experienced a deeper five-year drawdown. Both funds exhibit a preference for technology stocks, but VBK has a more pronounced tilt towards this sector.
In terms of key metrics, VBK charges an expense ratio of 0.07%, while SLYG has a slightly higher expense ratio of 0.15%. VBK has delivered a 1-year return of 14.4% compared to SLYG’s 10.2%. Additionally, VBK has a lower dividend yield of 0.5% compared to SLYG’s 0.8%. The beta for VBK is 1.43, indicating higher volatility compared to SLYG’s beta of 1.18. Furthermore, VBK boasts a substantial AUM of $39.7 billion, dwarfing SLYG’s $3.7 billion.
VBK tracks a basket of 579 U.S. small-cap growth stocks, with a significant allocation to technology, industrials, and healthcare sectors. Its top holdings include Insmed Inc, Comfort Systems USA Inc, and SoFi Technologies Inc. On the other hand, SLYG covers 336 stocks with a slightly lower exposure to technology, focusing more on industrials and healthcare sectors. Its top holdings include Arrowhead Pharmaceuticals Inc, Armstrong World Industries, and Jbt Marel Corp.
Both funds offer straightforward exposure to small-cap growth factors without leverage, currency hedges, or ESG overlays. SLYG emphasizes sales growth and momentum in its selection process, while VBK’s approach results in broader diversification and heavier tech exposure.
In conclusion, investors should consider their priorities when choosing between SLYG and VBK. VBK may be more suitable for those seeking lower expenses, higher returns, and greater liquidity, despite its higher volatility. On the other hand, SLYG could be a better choice for investors looking for lower volatility and exposure to non-tech sectors. Ultimately, the decision should align with individual investment goals and risk tolerance.
