VUG vs. VOOG Is Not a Fee Fight | How the Cheaper Vanguard Growth ETF Is Losing
Two nearly identical Vanguard growth ETFs are posting returns that differ by five full percentage points this year, and the cheaper one is losing. The reason has nothing to do with fees.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Investors who pick growth ETFs based solely on expense ratio are optimizing the least important variable in 2026. Vanguard Growth ETF (NYSEARCA:VUG) charges an ultra-low 0.03%, while Vanguard S&P 500 Growth ETF (NYSEARCA:VOOG) costs 0.07%, yet VOOG has been the better performer year to date and over the trailing 12 months.
Year to date, VOOG has returned roughly 14%, compared with about 10% for VUG, a gap wider than four basis points of fees could explain. Over the trailing twelve months, VOOG is up about 22%, compared with roughly 16% for VUG. Both funds hold roughly 150 mega-cap growth names, so the divergence stems from how the underlying indexes weight the shared holdings.
Same Universe, Different Rulebooks
VUG tracks the Morningstar US Large Cap Growth Index while VOOG follows the S&P 500 Growth Index, drawing only from S&P 500 constituents classified as growth. The overlap in top holdings is heavy, but individual weights differ meaningfully.
NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) accounts for 13.3% of VUG and nearly 14.3% of VOOG, while Apple (NASDAQ:AAPL) accounts for 12.3% of VUG and only 6.4% of VOOG. Broadcom (NASDAQ:AVGO) shows up at 5.9% in VOOG versus 4.4% in VUG, and Microsoft (NASDAQ:MSFT) is close to a tie at 9.1% in VUG and 9.3% in VOOG. Those single-digit weighting gaps compound across the largest positions in both portfolios.
Why Apple’s Weight Matters
VUG’s roughly double Apple weight has been a drag in 2026, as Apple has lagged the AI-heavy names that dominate both indexes. VOOG’s lighter Apple exposure freed capacity that its methodology reallocated toward Nvidia and Broadcom, two of this year’s biggest semiconductor winners (we profiled seven companies powering that same AI buildout, beyond the chipmakers, in a free report you can grab here).
The software megacaps sit at similar weights in both funds, with Microsoft effectively tied and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) exposure broadly comparable. VOOG’s index holds more of what worked and less of what did not, purely because of how S&P’s growth score ranks constituents. That methodological outcome explains why a five-point return gap opens between two Vanguard funds that look nearly identical.
Is VOOG’s Edge Repeatable?
The tempting conclusion is that VOOG will keep winning, but the more defensible answer is that its lead is period-specific. The S&P 500 Growth methodology leans on momentum and earnings signals, which tilt toward whichever megacaps have run the hardest.
In years where Apple leads or a battered software name recovers, VUG’s broader Morningstar universe will likely narrow the gap or reverse it. Over five years, the funds are much closer, with VOOG up roughly 88% and VUG up about 80%, a spread that reflects normal drift rather than a permanent structural advantage. Anyone betting on VOOG to keep beating VUG is really betting that the current AI concentration will continue to pay off, which is a call on the market itself.
Portfolio Fit and the Fee Illusion
VOOG suits an investor who wants US large-cap growth filtered through the S&P 500’s quality screen and is comfortable with heavier semiconductor exposure. VUG fits someone who wants a slightly broader growth net and values the fee savings on large balances, accepting that heavier Apple weight will hurt in years like this one.
Holding both is redundant given the overlap at the top, so most investors should pick one as their core growth sleeve. Scale still favors VUG, which dwarfs VOOG’s $26.5 billion in net assets and continues to gather flows despite recent performance lag. Four basis points of fee savings cannot overcome a five-point return gap driven by index construction.
Contact [email protected] for any questions or corrections.
Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth and cyclical stocks that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as cryptocurrencies and penny stocks.
