When all is said and done, exchange traded fund (ETF) investors typically seek to outperform and book a tidy profit over the long run. At the same time, sensible ETF investors want to reduce their risk as much as reasonably possible.
To make ETF investing simple and convenient, iShares and Vanguard offer extensive menus of low-cost, diversified funds. In today’s match-up, an iShares fund and a Vanguard fund will go head to head in a comparison of benefits and drawbacks. One of them is bound to outperform the other, so stick around to see which ETF will be declared the winner.
IVV: Cheap Index Fund Gets the Job Done
In the spirit of the “keep it simple” principle, iShares brings you an ETF with a basic but worthwhile function: to track the price performance of the S&P 500 large-cap index. Since diversification can help to de-risk your portfolio, it’s not a bad idea to own the iShares Core S&P 500 ETF (NYSEARCA:IVV | IVV Price Prediction) as it includes roughly 500 stocks.
The holdings list of the IVV ETF contains the S&P 500 members you would probably expect to see: Apple (NASDAQ:AAPL), Bank of America (NYSE:BAC), Coca-Cola (NYSE:KO), Walmart (NYSE:WMT), Home Depot (NYSE:HD), and so on. Just like the S&P 500 itself, the iShares Core S&P 500 ETF covers a multitude of blue-chip stocks from a variety of market sectors.
Furthermore, the IVV ETF features a trailing 12-month dividend yield of 1.16%, which is about what you might expect from this type of index fund. Additionally, the iShares Core S&P 500 ETF is somewhat heavily weighted toward technology stocks like NVIDIA (NASDAQ:NVDA) and Apple, but it’s not excessively lopsided.
All in all, the iShares Core S&P 500 ETF has a straightforward task (faithfully tracking the S&P 500) and it gets the job done. Perhaps the best feature of the IVV ETF is its ultra-low operating fees; believe it or not, this fund only imposes an expense ratio of 0.03%, which would translate to $0.03 per year for a $100 investment.
Turning to the topic of share-price performance, the iShares Core S&P 500 ETF was up by around 15% (not including dividend payments) over the past 12 months as of October 21, 2025. That’s a respectable gain, especially when we consider how low-risk this fund is. Hence, there’s nothing to complain about and in all likelihood, the IVV ETF will continue to deliver decent share-price returns along with an annual dividend of around 1%.
VUG: A Tech-Heavy Growth Vehicle
Sometimes, you have to be willing to accept slightly higher risk if you want to outperform a basic S&P 500 fund like IVV. Perhaps the Vanguard Growth ETF (NYSEARCA:VUG) can meet the “need for speed,” so to speak, as it’s built to beat the market for the long haul.
The Vanguard Growth ETF has an annual expense ratio of 0.04%, which is super-low and not very different from the iShares Core S&P 500 ETF’s expense ratio. Thus, in terms of low expenses, one fund doesn’t hold a major advantage over the other.
Moving on to the topic of passive income collecting, the Vanguard Growth ETF’s 0.39% dividend yield isn’t as appealing as the IVV ETF’s 1.16% yield. Consequently, we can score a point in favor of the iShares Core S&P 500 ETF.
Ultimately, though, folks who hold the Vanguard Growth ETF are probably seeking bigger share-price gains, not larger dividend payments. On that front, VUG easily beats IVV.
Over a 12-month period, the Vanguard Growth ETF’s share price increased by approximately 23%, as compared to roughly 15% for the IVV ETF. In that context, the iShares Core S&P 500 ETF’s larger dividend yield didn’t mean much.
But again, greater rewards will typically involve a higher degree of risk. Unlike the IVV ETF, the Vanguard Growth ETF has a very heavy weighting toward just one sector: technology. Just NVIDIA stock by itself comprises 12.01% of VUG’s portfolio; other major stock holdings of this fund include Microsoft (NASDAQ:MSFT) (10.7% weighting) and Apple (10.47% weighting).
Picking a Winner, but With a Warning
Frankly, not everyone will want to own the Vanguard Growth ETF since one-third of this fund is just three stocks, and all three of those stocks are in the same sector. In other words, VUG is riskier than IVV due to its heavily concentrated weightings profile.
Still, if you’re prepared to accept more risk than simply holding a broad-market index fund like the iShares Core S&P 500 ETF, then the Vanguard Growth ETF is a clear winner. Even after factoring in the expense ratios and the dividend yields, the VUG ETF has historically beaten the S&P 500 and will probably continue to do so.
That said, there’s nothing wrong with owning shares of both of these perfectly fine funds. If you’d like, you could use the iShares Core S&P 500 ETF as your anchor and the Vanguard Growth ETF as your growth vehicle — not a bad strategy for a balanced mix of highly reliable funds, you must admit.
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