The iShares Russell 1000 Growth ETF (IWF -0.69%) is one of the largest and most popular exchange-traded funds (ETFs) focused on companies growing their earnings at above-average rates. It enables investors to target growth stocks, which can enhance their investment returns.

While I think the iShares Russell 1000 Growth ETF is great for most investors seeking to tap into the outsize return potential of growth stocks, I like the Vanguard Growth ETF (VUG -0.53%) better. Here's why.

Image source: Getty Images.

Nearly mirror images at the top

The iShares Russell 1000 Growth ETF and the Vanguard Growth ETF focus on holding companies growing their earnings faster than the market's average. For example, VUG's holdings have grown their earnings at a 27.5% annual rate over the past five years.

While both ETFs track growth stocks, there's a subtle difference. The Vanguard Growth ETF tracks an index, the CRSP US Large Cap Growth Index, that holds only large-cap growth stocks, while the iShares Russell 1000 Growth ETF tracks an index, the Russell 1000 Growth Index, that consists of large- and mid-cap stocks. As a result, IWF has more holdings than VUG (392 to 166).

However, because both funds have a market weighting, their top holdings are identical with very similar weightings:

Data sources: BlackRock and ETF.com

The slight difference in allocation is primarily due to the dates of the last available holdings update for these funds. Given that their top 10 holdings -- which comprise nearly 60% of their assets -- are roughly mirror images, you could easily choose either fund for similar exposure to the top growth stocks.

Two notable differences

While the iShares Russell 1000 Growth ETF and Vanguard Growth ETF have very similar holdings, there are two notable differences. The first one is cost. IWF's ETF expense ratio is 0.19%, while VUG's is much lower at 0.04%. That's due to Vanguard's emphasis on keeping costs low for investors so that they can keep more of the returns generated by its funds.

To put the cost difference into perspective, for every $10,000 invested, you'd pay the IWF fund manager $19 annually while only paying $4 per year for VUG. That higher cost will eat into IWF's returns over the long term.

Speaking of returns, that's another area where VUG stands out compared to IWF:

Data sources: BlackRock and Vanguard. NOTE: IWF fund inception is 5/22/00, while VUG's is 1/26/04.

As that table shows, VUG has delivered much higher returns than IWF in every period other than the past five years. That's because larger-cap growth stocks have generally produced higher returns than mid-cap growth stocks in more recent years. That drag and its higher expense ratio have weighed on IWF's returns.

Better returns and lower costs on the same strategy

The iShares Russell 1000 Growth ETF is a great ETF to buy to increase your portfolio's allocation to faster-growing companies. However, I think the Vanguard Growth ETF is a better option. It provides investors with exposure to most of the same holdings at a lower cost. Its strategy has enabled it to produce higher returns for its investors over the years. That's why I'd pick VUG over IWF to add more growth to your portfolio.