RZG Delivers Larger Gains Than SLYG, but It Comes With Increased Risk and Higher Fees
Key Points
RZG charges higher fees and yields less than SLYG, but delivered stronger one-year returns as of March 2026
RZG’s smaller assets under management and much lower trading volume could make large trades slower or more expensive
Sector weights differ: RZG leans into healthcare while SLYG splits most between industrials, tech, and healthcare
The State Street SPDR S&P 600 Small Cap Growth ETF (NYSEMKT:SLYG) and the Invesco S&P SmallCap 600 Pure Growth ETF (NYSEMKT:RZG) each target U.S. small-cap growth stocks, but RZG comes with higher costs, a sharper healthcare tilt, and greater liquidity concerns than SLYG.
Both SLYG and RZG track indexes focused on small-cap companies with strong growth characteristics, but there are notable differences in cost, sector exposure, and practical considerations such as liquidity. This comparison highlights the most relevant tradeoffs for investors evaluating these two funds.
Snapshot (cost & size)
| Metric | SLYG | RZG |
|---|---|---|
| Issuer | SPDR | Invesco |
| Expense ratio | 0.15% | 0.35% |
| 1-yr return (as of 2026-03-11) | 18.3% | 23.6% |
| Dividend yield | 0.8% | 0.4% |
| Beta | 1.06 | 1.16 |
| AUM | $4.0 billion | $108.9 million |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The one-year return represents total return over the trailing twelve months.
RZG charges more than twice the annual fee of SLYG and pays out a lower yield, making SLYG more affordable and slightly more attractive for those prioritizing income.
Performance & risk comparison
| Metric | SLYG | RZG |
|---|---|---|
| Max drawdown (five years) | (29.18%) | (38.31%) |
| Growth of $1,000 over five years | $1,086 | $1,042 |
What's inside
RZG tracks a “pure growth” version of the S&P SmallCap 600, holding 130 stocks as of March 2026, with the heaviest weights in healthcare (24%), technology (19%), and industrials (16%). The fund’s largest positions—ACM Research Inc(NASDAQ:ACMR), Clear Secure Inc(NYSE:YOU), and Powell Industries Inc (NASDAQ:POWL)— each account for under two percent of assets. RZG has a 20-year track record, but assets under management remain modest, and the fund is rebalanced annually.
SLYG tracks a broader S&P SmallCap 600 Growth Index, with 339 holdings and a more balanced sector mix: industrials and technology at 19% each, and healthcare at 17%. Its top positions—Interdigital Inc (NASDAQ:IDCC), Caretrust Reit Inc (NYSE:CTRE), and Sitime Corp (NASDAQ:SITM)—are similarly small in weight. There are no leverage, currency, or ESG quirks for either fund.
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What this means for investors
Investors seeking exposure to U.S. small-cap stocks would be wise to consider State Street SPDR S&P 600 Small Cap Growth ETF (SLYG) and Invesco S&P SmallCap 600 Pure Growth ETF (RZG). That said, there are some differences they should be aware of between these two exchange-traded funds (ETFs).
First off, SLYG wins the head-to-head matchup in several key respects. SLYG has a significantly lower expense ratio (0.15% versus 0.35%). It also has far more AUM ($4.0 billion vs. $0.1 billion). That factor is particularly important when buying or selling shares. The greater a fund’s AUM, the greater the ETF’s liquidity. In turn, investors will find it easier to have their orders filled when buying or selling shares. Lastly, SLYG boasts a higher dividend yield (0.8% vs. 0.4%).
RZG only outperforms SLYG on one metric, but it is a very important one: Performance. RZG has posted a one-year return of 23.6%, easily besting SLYG’s 18.3%. In addition to this, the fund holds fewer positions than its rival (130 vs. 339). This might actually appeal to more aggressive investors, who are seeking greater returns and are willing to accept the higher volatility.
To sum up, SLYG and RZG both offer exposure to U.S. small-cap growth stocks, but SLYG stands out for its lower costs, higher yield, and greater assets under management, while RZG may appeal to those seeking greater risk and return through a more concentrated portfolio and who are comfortable with lower liquidity and higher fees.
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Jake Lerch has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends SiTime. The Motley Fool has a disclosure policy.
