Vanguard's cheaper VUG ETF trails VOOG by 5% in 2026 due to index weightings, not fees.

In 2026, Vanguard's Growth ETF (VUG) has underperformed the slightly more expensive VOOG by about 5 percentage points, despite VUG's lower fee of 0.03% compared to VOOG's 0.07%. The performance gap arises from differences in how their underlying indexes weight shared holdings, not from fees. VOOG's index favors semiconductor giants like Nvidia and Broadcom, which have outperformed Apple, a heavier holding in VUG. This difference in index methodology explains the return gap, but over five years, their performance is much closer, suggesting the current lead is specific to recent market trends, particularly in AI-related stocks.