Investors using ETFs to bet on growth stocks this year have seen wildly different results depending on which funds they use, even if they stuck to low-cost index products. Aniket Ullal, CFRA’s head of ETF data and analytics, pointed out in a note to clients on Wednesday that the biggest growth index ETFs on the market are diverging widely so far this year. The Vanguard Growth ETF (VUG) has blown past one of its closest competitor from iShares, the S & P 500 Growth ETF (IVW) . The Vanguard fund has a total return of 7.96% this year, while the iShares fund has returned just 3.15%, according to FactSet. The iShares Russell 1000 Growth ETF (IWF) , meanwhile, has added 6.4%. Part of the difference among the three is likely due to the varying universe of stocks that are eligible for the funds, such as the Russell 1000 constituents versus the S & P 500. But another major factor is how the style factor indexes that the funds track are constructed, according to Ullal. The Vanguard funds track the growth indexes from CRSP, while iShares S & P 500 follows products from S & P Dow Jones. Both index providers use growth in earnings per share and sales as part of their growth scores, but one key difference is that S & P also bakes in price momentum — meaning that the hot stocks from 2022 got added into the fund at the December rebalance, while some major technology names fell out. “This resulted in the S & P growth indices being overweight in Energy and Healthcare and underweight in Information Technology (IT) and Communication Services relative to indices from Russell and CRSP. Since IT has done well this year and energy has not, ETFs tracking S & P indices have underperformed growth ETFs tracking other indices,” Ullal wrote. For example, the Vanguard fund has a weight of more than 1% in Meta Platforms , which is no longer present in the iShares S & P fund. Meanwhile, the iShares S & P fund has more than a 4% combined weighting in ExxonMobil and Chevron . The Vanguard fund also offers higher exposure to Apple , Microsoft and Amazon . S & P Dow Jones flagged this shift in a Jan. 16 blog post . Hamish Preston, the firm’s director for U.S. equity indices, wrote that the style indexes saw record turnover, with seven energy companies moving to growth from value. “31% and 32% of the market capitalization of the S & P 500 Value and the S & P 500 Growth, respectively, was affected by the December 2022 style review. These one-way turnover figures were higher than for any annual reconstitution since the current style measures were adopted in 2009,” Preston wrote. The Russell 1000 ETF tracks indexes from FTSE Russell, which also does not use price momentum. The dispersion in returns seen in 2023 is unusual, at least on a long-term basis. Over the past 10 years, the annualized total return for the Vanguard and the iShares S & P funds are nearly identical, at around 13%. The iShares Russell 1000 ETF has outperformed slightly, with an average return of nearly 14%. The difference between these types of funds in 2023 is even stranger at the small cap level, making it hard to tell whether growth or value is outperforming. “In the U.S. small-cap space, ETFs tracking CRSP indices show growth outperforming value by 2.2%. However, in the very same category, ETFs tracking S & P indices show value outperforming growth,” Ullal wrote. The performance gaps show the importance of investors learning more about the indexes that sector and style funds are based on, Ullal said. “Investors often search and compare ETFs based on asset class or strategy, expense ratio, and fund sponsor. However, as we have seen with growth and value ETFs in 2023, the methodology of the indices underlying ETFs can also play a significant role in determining investor returns,” he wrote.