If you're hunting for growth stock exposure without having to pick individual winners, exchange-traded funds make life easier. You get instant diversification, low costs, and the ability to trade throughout the day. Two ETFs dominate the large-cap growth conversation: Vanguard Russell 1000 Growth ETF (VONG) and Schwab U.S. Large-Cap Growth ETF (SCHG). Both target big U.S. companies with growth characteristics, but they approach that mission differently. And in 2026's market environment, with money sloshing between sectors like it's musical chairs, those differences actually matter.

Breaking Down What You're Actually Buying

VONG tracks the Russell 1000 Growth Index, which sounds fancy but basically means it owns about 500 large-cap U.S. companies that exhibit above-average growth potential. Its portfolio leans heavily into technology, consumer discretionary, and healthcare. The top holdings read like a who's who of the smartphone-and-cloud era: Apple Inc. (AAPL), Microsoft Corp. (MSFT), and Amazon.com Inc. (AMZN). If you believe mega-cap tech will continue running the table, VONG delivers that exposure in concentrated form.

SCHG takes a slightly different path. It follows the Dow Jones U.S. Large-Cap Growth Total Stock Market Index and holds around 120 names. That's fewer stocks than VONG, but SCHG spreads its bets differently. It still owns plenty of technology giants like Alphabet Inc. (GOOG) and Nvidia Corp. (NVDA), but the weighting toward mega-cap tech isn't quite as extreme. You get more exposure to mid-sized growth companies, which can be a feature or a bug depending on what you're trying to accomplish.

The Sector Concentration Question

Here's where things get interesting. VONG allocates roughly 50% of its portfolio to technology stocks. That's a lot of eggs in one basket, even if that basket is filled with profitable companies generating massive cash flows. SCHG's technology allocation sits closer to 40%, which still qualifies as tech-heavy but leaves more room for other sectors to contribute.

SCHG also carries higher weightings in healthcare and consumer discretionary mid-caps. This matters because we're watching a real-time sector rotation play out in early 2026. Investors are rotating out of the mega-cap tech names that dominated recent years and into small-caps, mid-caps, energy, and industrials. If that trend continues, VONG's concentrated tech exposure could translate to higher volatility. SCHG's broader sector mix might offer a smoother ride, though potentially at the cost of missing some upside if tech roars back.

How They've Actually Performed

Over the past year, both ETFs have delivered solid returns as U.S. growth stocks rebounded from 2025's inflation and interest rate turbulence. As of January 10, 2026, VONG has returned approximately 14.8% year-to-date, while SCHG sits at 13.5%. That's a meaningful difference, but it comes with VONG's higher sector concentration risk baked in.

Zoom out to five years, and the gap narrows considerably. VONG has averaged 16.2% annually compared to SCHG's 15.6%. They're closely matched over longer periods, which makes sense given their overlapping holdings. The key difference is volatility. VONG tends to swing harder both up and down, which may not suit investors with lower risk tolerance or those worried about potential tech pullbacks.

The Cost Equation

Both funds are absurdly cheap by historical standards. VONG charges an expense ratio of 0.04%, while SCHG comes in even lower at 0.03%. We're talking about $3 to $4 per year for every $10,000 invested. The difference barely registers for most investors, though over decades with large portfolios, every basis point counts.

Tracking error matters too. This measures how closely an ETF mirrors its underlying index. Both VONG and SCHG maintain tight tracking relative to their benchmarks, so you're getting what you pay for without unexpected drift.

Liquidity Considerations

VONG trades about 300,000 shares daily on average, while SCHG does around 450,000 shares. Higher trading volume generally means tighter bid-ask spreads, making it slightly easier to enter or exit positions in SCHG. For most retail investors buying a few thousand dollars' worth, this difference is negligible. But if you're trading larger blocks or care about execution precision, SCHG has a modest edge.

What Today's Market Environment Means for Your Choice

The decision between these two ETFs isn't happening in a vacuum. Several trends in early 2026 shape which might fit better:

Sector Rotation Is Real: Money is moving away from concentrated mega-cap tech toward more diversified growth exposures. SCHG's broader sector balance could provide a hedge if tech stumbles while still capturing upside from mid-cap growth names gaining momentum.

Interest Rate Sensitivity: Growth stocks react sharply to interest rate changes because their valuations depend heavily on discounting future cash flows. With expectations pointing toward stable or slightly declining rates in 2026, both ETFs remain attractive. But VONG's tech-heavy composition could deliver higher returns if rates cooperate, assuming you can stomach the volatility.

Your Personal Risk Appetite: Aggressive investors chasing maximum exposure to technology innovation and AI-driven growth will likely prefer VONG. If you're more risk-averse or want smoother performance during rotation-heavy periods, SCHG makes more sense.

Thematic Opportunities: SCHG's moderate exposure to healthcare and consumer discretionary can capture ongoing spending trends and sector momentum outside technology. That diversification might generate more stable returns near-term, especially if consumer resilience continues surprising to the upside.

Practical Decision Framework

If you're trying to decide between these two today, here's how to think about it:

Go with VONG if: You want aggressive growth focused on mega-cap technology, you're comfortable with higher volatility for potentially higher gains, and you believe tech leadership will persist despite rotation noise.

Choose SCHG if: You prefer balanced growth exposure combining mega-cap tech with mid-cap growth and other sectors, you're navigating a rotation-heavy market and want smoother performance, or you're looking to diversify away from existing concentrated tech positions.

Cost and Liquidity: Both ETFs are low-cost and sufficiently liquid for most investors. SCHG's slightly higher trading volume could make it marginally more efficient for frequent traders, but this rarely moves the needle for buy-and-hold investors.

Portfolio Context Matters: Think about how either ETF fits your broader portfolio. If you already own individual tech stocks or other tech-focused funds, SCHG provides better diversification. If you're underweight technology and want concentrated exposure, VONG delivers that in a diversified wrapper.

Making the Call

Both Vanguard Russell 1000 Growth ETF (VONG) and Schwab U.S. Large-Cap Growth ETF (SCHG) remain solid choices for growth-oriented investors in 2026. VONG gives you concentrated exposure to the mega-cap technology leaders driving secular growth trends. SCHG offers broader sector diversification and somewhat lower volatility.

In today's market, characterized by active sector rotation and cautious investor sentiment, the scales may tip slightly toward SCHG for investors wanting a balanced approach. But aggressive investors confident in continued tech dominance might find VONG more compelling, especially if they believe current rotation trends are temporary noise rather than structural shifts.

Ultimately, this comes down to your risk tolerance, investment time horizon, and existing portfolio composition. Both funds are well-positioned to capture the ongoing growth story of U.S. large-cap stocks. Neither is a bad choice. The question is which one aligns better with how you're thinking about risk and opportunity in 2026's evolving market landscape. That's a question only you can answer based on your specific situation.