Start with classes then break down into sub groups allows to target and also to use as encouragement within class as which team is the best.
I start with a class and if I have them long enough to put them into sets within the class I would do that and that might involve creating 2 different sets - but in reality I would probably have each group include every all that are in the class and then set different work on an assignment by assignment basis. I don;t mind what you call it, it is the flexibility that matters and that is there.
i set up a whole year group as a student set and then create subsets from this.
I use both classes and sub groups of a class in order to set tasks - this helps with differentiation.