VOOG vs VBK: AI Rally Favors Large-Cap Growth

Vanguard’s S&P 500 Growth ETF, or VOOG, is heavily exposed to the biggest winners in the AI trade. Technology makes up 54% of the fund, and its top holdings include Nvidia at 14.99%, Microsoft at 10.34% and Apple at 6.60%, giving it a portfolio built around companies with deep cash flow, dominant market positions and direct exposure to AI spending.

The case for that concentration has only strengthened as large-cap growth continues to attract capital even in choppy markets. On Nov. 5, the Nasdaq-heavy QQQ fell 6.3% in two sessions to $647.05, with its 14-day RSI slipping to 30.3 and the price dropping below its 50-day moving average, a reminder that volatility remains high even for the AI leaders. Still, the larger names are better positioned to absorb the cost of multibillion-dollar data-center, chip and cloud investments.

By contrast, the Vanguard Morningstar Small-Cap Growth ETF, or VBK, spreads its bets across 551 companies and carries a more balanced sector mix, with technology at 29%, healthcare at 21% and industrials at 20%. Its biggest holdings — including Natera, Twilio and Revolution Medicines — are more sensitive to financing conditions, execution risk and shifts in investor appetite for unprofitable or earlier-stage businesses.

That makes the macro backdrop especially important. The 10-year Treasury yield stood at 4.84% on Nov. 5, while the Federal Reserve has stayed cautious on inflation, keeping the cost of capital high enough to pressure smaller growth companies that depend more on external funding. Even with U.S. industrial production edging higher and job openings still elevated, the recovery has not yet broadened enough to erase the financing advantage enjoyed by larger peers.

The performance gap also shows up in the market. SPY, the S&P 500 ETF, fell to $735.29 on Nov. 6 after a sharp one-day drop in which its RSI fell to 35.5, while Russell 2000 proxy IWM closed at $273.67, hovering near its 200-day moving average but still well below its 2026 highs. That kind of relative behavior underscores how investors are rewarding size, profitability and AI leverage over pure small-cap growth exposure.

VOOG also comes cheaper on the portfolio management side only by a hair, with a 0.07% expense ratio versus 0.05% for VBK, but the bigger difference is composition, not cost. VOOG’s yield of 0.38% reflects its concentration in growth giants, while VBK’s 0.42% yield and broader basket offer diversification, but less direct participation in the current AI infrastructure cycle.

For long-term investors, the key question is not which fund is “growthier,” but which kind of growth the market is paying for. As long as AI spending remains concentrated in megacap tech and rates stay relatively restrictive, VOOG is likely to keep the edge; VBK would need a meaningful broadening in earnings growth, easier credit conditions and a more durable small-cap rally to close the gap.