Looking for broad exposure to the Small Cap Growth segment of the US equity market? You should consider the Vanguard Morningstar Small-Cap Growth ETF (VBK Quick QuoteVBK - Free Report) , a passively managed exchange traded fund launched on January 26, 2004.

The fund is sponsored by Vanguard. It has amassed assets over $22.24 billion, making it the largest ETF attempting to match the Small Cap Growth segment of the US equity market.

Why Small Cap Growth

There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.

While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility associated with them. 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

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.05%, making it the least expensive products in the space.

It has a 12-month trailing dividend yield of 0.42%.

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 Information Technology sector -- about 25.8% of the portfolio. Industrials and Healthcare round out the top three.

Looking at individual holdings, Slcmt1142 accounts for about 2.09% of total assets, followed by Natera Inc (NTRA) and Twilio Inc (TWLO).

Performance and Risk

VBK seeks to match the performance of the CRSP U.S. Small Cap Growth Index before fees and expenses. The Morningstar US Small Cap Growth Index seeks to accurately represent the small-cap growth segment of the U.S. equity market and deliver low turnover.

The ETF has added about 9.63% so far this year and is up roughly 10.31% in the last one year (as of 11/02/2026). In the past 52-week period, it has traded between $281.53 and $366.24.

The ETF has a beta of 1.18 and standard deviation of 20.91% for the trailing three-year period, making it a medium risk choice in the space. With about 559 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard Morningstar Small-Cap Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VBK is an outstanding option for investors seeking exposure to the Style Box - Small Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.

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 $7.44 billion in assets, iShares Russell 2000 Growth ETF has $13.89 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.