If you're interested in broad exposure to the Small Cap Growth segment of the US equity market, look no further than the Vanguard Small-Cap Growth ETF (VBK), a passively managed exchange traded fund launched on January 26, 2004.
The fund is sponsored by Vanguard. It has amassed assets over $20.84 billion, making it the largest ETF attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Also, growth stocks are a type of equity that carries more risk compared to others. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.54%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector -- about 22.9% of the portfolio. Information Technology and Healthcare round out the top three.
Looking at individual holdings, Slcmt1142 accounts for about 1.59% of total assets, followed by Sofi Technologies Inc (SOFI) and Reddit Inc (RDDT).
Performance and Risk
VBK seeks to match the performance of the CRSP U.S. Small Cap Growth Index before fees and expenses. The CRSP U.S. Small Cap Growth Index measures the investment return of small-capitalization growth stocks.
The ETF return is roughly 9.4% so far this year and it's up approximately 12.85% in the last one year (as of 10/16/2025). In the past 52-week period, it has traded between $219.76 and $305.57.
The ETF has a beta of 1.17 and standard deviation of 21.5% for the trailing three-year period, making it a medium risk choice in the space. With about 577 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Small-Cap Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VBK is a good option for those seeking exposure to the Style Box - Small Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The iShares S&P Small-Cap 600 Growth ETF (IJT) and the iShares Russell 2000 Growth ETF (IWO) track a similar index. While iShares S&P Small-Cap 600 Growth ETF has $6.30 billion in assets, iShares Russell 2000 Growth ETF has $13.49 billion. IJT has an expense ratio of 0.18% and IWO charges 0.24%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Vanguard Small-Cap Growth ETF (VBK): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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