Growth ETFs Share Megacaps, but a 0.03% Fee Isn't Enough

Vanguard, Schwab and State Street offer three growth ETFs that pursue the same megacap stocks under different index rules, with one charging 0.03%.

A 0.03% fee is a useful starting point for choosing a growth exchange-traded fund. It is not enough to establish which fund belongs in a portfolio. Three growth ETFs from Vanguard, Schwab and State Street pursue the same megacap stocks, yet their different index rules can produce different investment outcomes.

The practical distinction is between buying familiar companies and buying a particular allocation to those companies. An ETF is a basket of securities that trades on an exchange. Even when competing baskets contain similar names, the amount invested in each holding—and the rules governing future changes—can make the experience meaningfully different.

The comparison identified by 24/7 Wall St includes a fund charging 0.03%. The investment question before 2027 is not simply which provider offers the cheapest product. It is which portfolio construction best fits the exposure an investor actually wants.

Shared holdings do not mean equal exposure

Megacap stocks are companies with exceptionally large stock-market values. Their presence in several growth funds can make the funds look interchangeable when an investor scans the leading holdings. But a holdings list tells only part of the story: the weight assigned to each stock determines how much that stock influences the portfolio.

If a shared holding advances, a fund with a heavier allocation to it generally receives a larger contribution from that move, all else equal. The same relationship works in reverse when the stock falls. This is why comparing company names without comparing weights can obscure the risk an investor is taking.

The rest of the basket matters, too. Funds can share their most prominent stocks while differing in their smaller positions, sector exposure or eligibility requirements. Those differences can become important when market leadership broadens beyond the largest companies, or when the biggest holdings stop moving together.

For someone who already owns a broad stock fund, adding a growth ETF therefore requires an overlap check. A new fund may increase exposure to companies already owned rather than introduce a substantially different source of returns. That may be intentional, but it should not be mistaken for diversification merely because the fund has a different label.

The index rulebook determines what changes next

An index is the set of selection and weighting rules an index-tracking fund follows. The verified distinction among these growth ETFs is that they use different rulebooks. That matters because an investor is buying not just today's holdings, but also a process for deciding what the fund will own in the future.

A useful comparison begins with how each index defines growth. Investors should examine whether the methodology relies on measures of business expansion, market valuation, or a combination of characteristics. These are questions to check in the actual index documents, not assumptions that can safely be made from the word “growth” in a fund description.

Next comes the eligible universe: which stocks can enter the index in the first place. Then comes weighting: how the index allocates its exposure among eligible companies. Any limits on individual holdings or sectors also deserve attention, because they can change how strongly the fund depends on its largest positions.

Finally, investors should examine reconstitution and rebalancing. Reconstitution changes index membership; rebalancing adjusts portfolio weights. Their timing and rules affect how a fund responds when companies grow, shrink or no longer meet the index's criteria. None of those details should be presumed identical across these products.

The available facts establish different methodologies, but do not identify the funds or supply their detailed selection formulas, portfolio weights or adjustment schedules. That prevents a defensible fund-by-fund ranking. It does not prevent identifying the decisions that need to be compared before choosing one.

A 0.03% charge still needs a portfolio-fit test

Lower recurring costs leave more of a fund's gross investment return with shareholders, all else equal. The 0.03% charge is therefore relevant. But the other funds' fees are not supplied, so the available facts do not establish the size of any cost advantage or identify which provider offers the lowest-cost product.

Nor can a small fee resolve a mismatch between a fund and an investor's goal. Someone seeking a pronounced growth tilt may accept greater dependence on the largest growth companies. Someone looking for a broadly diversified core holding may want less concentration. The cheaper choice is not automatically the better fit for both investors.

There is also a distinction between a fund's stated recurring charge and the costs of entering or leaving a position. ETF buyers should check the bid-ask spread—the gap between available buying and selling prices—and whether their broker charges a commission. Those costs depend on the product and transaction; no specific trading-cost comparison is established here.

For an existing shareholder, switching deserves a separate review. In a taxable account, selling can realize a gain or loss. A decision driven only by a lower advertised fee can overlook that consequence. The relevant comparison is the expected benefit of the new exposure against the costs and tax effects of making the change.

Market gains are context, not a fund ranking

The supplied benchmark snapshot for the most recent close, as of October 1, 2026, at 20:00 GMT, showed the S&P 500 benchmark up 0.18%, the Nasdaq 100 benchmark up 0.31% and the Dow benchmark up 0.01% on the day. The market was closed at that timestamp.

Those positive benchmark readings provide a market backdrop, not evidence that any of the growth ETFs outperformed another. They do not supply fund returns, reveal the funds' holdings or establish which index methodology worked best. A single closing snapshot also cannot answer whether a growth allocation is suitable for an investor's holding period.

The next step is a matched comparison using the actual fund identities, current holdings, index documents and full fee schedules. Investors should compare performance over matching periods and distinguish the effect of portfolio exposure from the effect of expenses. Until those details are available, the strongest conclusion is narrower than a buy recommendation: shared megacap names and a low fee do not make growth ETFs interchangeable.

Frequently asked questions

Why can growth ETFs with similar holdings perform differently?

Growth ETFs can own the same companies while assigning different weights to them. A larger allocation makes a stock's gains or losses more influential. Differences in smaller holdings, eligibility rules and portfolio adjustments can also change results. Shared company names therefore do not establish that competing funds provide identical exposure.

Which of the growth ETFs charges 0.03%?

The supplied facts establish that one of the three growth ETFs from Vanguard, Schwab and State Street charges 0.03%, but they do not identify the fund. Investors should verify the specific product and its current fee documents before assigning that charge to a provider or making a purchase.

What index rules should investors compare?

Investors should compare how each index defines growth, which stocks are eligible, how holdings are weighted and whether concentration limits apply. They should also examine when membership and weights change. The available facts confirm that the funds use different rules, but do not provide the detailed methodologies needed for a product-by-product comparison.

Does adding a growth ETF improve diversification?

Not necessarily. A growth ETF may own many of the same large companies already held through a broad stock fund. Adding it can increase existing exposure rather than create a substantially different allocation. Investors should compare holdings and weights across their entire portfolio before treating an additional fund as diversification.

Is the lowest-fee growth ETF always the best choice?

A lower recurring fee helps investors retain more gross return when other factors are equal. But funds with different index rules are not necessarily equivalent. Portfolio concentration, intended exposure, trading costs and possible tax consequences from switching can matter alongside the fee. The best fit depends on the investor's objective.

Do the supplied market figures show which growth ETF performed best?

No. The supplied market data describe benchmark moves at the most recent close on October 1, 2026, not returns for the growth ETFs being compared. Those readings provide context only. Ranking the funds would require their identities and comparable return data, neither of which is supplied in the verified facts.

Sources

• 3 Growth ETFs to Buy Before 2027: One Charges Just 0.03% — 24/7 Wall St

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