VOO vs. IWM: 2 Iconic Indexes, 2 Very Different Slices of the U.S. Market

By Sara Appino – Apr 17, 2026 at 11:11AM ESTKey PointsIWM charges a higher expense ratio and has a lower dividend yield than VOO.IWM’s small-cap focus led to a sharper five-year drawdown and lower long-term growth, but it has outperformed VOO over the past year.IWM tilts toward healthcare, industrials, and financials, while VOO is dominated by technology giants.The Vanguard S&P 500 ETF (VOO +1.28%) and the iShares Russell 2000 ETF (IWM +2.17%) stand apart on cost, risk, and portfolio composition -- VOO tracks large-cap U.S. leaders with ultra-low fees, while IWM offers small-cap exposure at higher cost, with greater volatility and a different sector mix.VOO and IWM both offer broad U.S. equity coverage, but they play in different arenas: VOO tracks the S&P 500’s blue-chip giants, while IWM zeroes in on small-cap stocks via the Russell 2000 Index. This comparison highlights how their costs, returns, risk profiles, and sector exposures stack up for investors seeking growth or diversification.Snapshot (cost & size)MetricVOOIWMIssuerVanguardiSharesExpense ratio0.03%0.19%1-yr return (as of 2026-04-16)35.0%47.5%Dividend yield1.1%0.92%Beta1.001.11AUM$1.4 trillion$71.9 billionBeta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.IWM is less affordable than VOO, with an expense ratio over six times higher; VOO also edges out IWM in dividend yield, offering a slightly higher payout to investors.ExpandNYSEMKT: VOOVanguard S&P 500 ETFToday's Change(1.28%) $8.27Current Price$653.13Key Data PointsDay's Range$648.86 - $653.9652wk Range$467.33 - $653.96Volume101KPerformance & risk comparisonMetricVOOIWMMax drawdown (5 y)-24.52%-31.92%Growth of $1,000 over 5 years$1,814$1,294IWM’s small-cap tilt means sharper price swings: Its maximum drawdown over the past five years was notably deeper than VOO’s, and $1,000 invested in IWM five years ago would have grown less than the same amount in VOO.ExpandNYSEMKT: IWMiShares Trust - iShares Russell 2000 ETFToday's Change(2.17%) $5.85Current Price$275.80Key Data PointsDay's Range$273.12 - $277.2652wk Range$180.76 - $277.26Volume1.6MWhat's insideIWM targets the small-cap segment of the U.S. equity market, holding 1,935 stocks with the largest weights in healthcare, industrials, and financial services. As of its 25.9-year track record, its top holdings—such as Bloom Energy (BE 2.39%), Credo Technology Group(CRDO 3.40%), and Fabrinet (FN +2.35%)—each make up less than 1.5% of the fund, resulting in a highly diversified mix.VOO, in contrast, is concentrated in large-cap names and heavily tilted toward technology, with its three largest holdings—Nvidia (NVDA +1.38%), Apple (AAPL +3.11%), and Microsoft (MSFT +1.95%)—together commanding nearly 20% of the portfolio. This means VOO’s returns are more sensitive to megacap tech performance, while IWM offers broader exposure to smaller, less dominant companies.For more guidance on ETF investing, check out the full guide at this link.What this means for investorsVOO and IWM are both foundational ETFs, each serving as the go-to benchmark for its respective corner of the U.S. market. VOO tracks the S&P 500 — America's 500 largest companies — and now holds roughly $1.4 trillion in assets, making it the largest ETF in the world. IWM tracks the Russell 2000, the most widely followed small-cap index, with around $72 billion in assets and a 25-year track record.They are less competitors than complements. VOO is heavily concentrated in technology and megacap names, with Nvidia, Apple, and Microsoft carrying significant weight. IWM spreads its 2,000 holdings across a far more balanced mix of healthcare, industrials, financials, and technology with no single sector above 18%.The trade-off is straightforward. IWM offers exposure to smaller, faster-growing companies with more room to run, but with meaningfully more volatility and a higher fee. VOO charges a fraction of what IWM costs and delivers steadier, more predictable returns anchored by the largest, most established businesses in America.Read NextApr 17, 2026 •By Jeremy BowmanBest Russell 2000 ETFs to Buy in 2026Apr 10, 2026 •By Ben GranCould Investing $10,000 in IWM Make You a Millionaire?Mar 31, 2026 •By Robin Hartill, CFPHow to Buy Peloton Stock (PTON) in 2026Mar 29, 2026 •By Katie BrockmanIWM vs. QQQ: How Small-Cap Diversification Compares to Large-Cap Growth for InvestorsMar 25, 2026 •By Jake LerchGo Big or Go Small? IWM Targets Small-Cap Stocks; MGK Owns Big Tech StocksApr 17, 2026 •By Katie BrockmanThe Iran War Shock Emphasizes Exactly Why a Low‑Cost S&P 500 ETF Belongs at the Core of Every Long‑Term PortfolioAbout the AuthorSara Appino is a contributing writer at The Motley Fool. Previously she held roles at McGraw-Hill Education, Sourcebooks, and The Field Museum of Natural History. A graduate of the University of Chicago and Northwestern University’s Medill School of Journalism, Sara also managed a surf and yoga retreat in Costa Rica for nearly a decade and helped launch a nonprofit English language program in her community there.TMFSaraAStocks MentionediShares Trust - iShares Russell 2000 ETFNYSEMKT: IWM$276.08(+2.27%)+$6.13Vanguard S&P 500 ETFNYSEMKT: VOO$653.83(+1.39%)+$8.97*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.