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Should Vanguard Russell 2000 Growth ETF (VTWG) Be on Your Investing Radar?
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Designed to provide broad exposure to the Small Cap Growth segment of the US equity market, the Vanguard Russell 2000 Growth ETF (VTWG - Free Report) is a passively managed exchange traded fund launched on 09/22/2010.
The fund is sponsored by Vanguard. It has amassed assets over $711.61 million, making it one of the average sized ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.65%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Healthcare sector--about 21.40% of the portfolio. Information Technology and Industrials round out the top three.
Looking at individual holdings, Shockwave Medical Inc. (SWAV - Free Report) accounts for about 0.74% of total assets, followed by Halozyme Therapeutics Inc. (HALO - Free Report) and Emcor Group Inc. (EME - Free Report) .
Performance and Risk
VTWG seeks to match the performance of the Russell 2000 Growth Index before fees and expenses. The Russell 2000 Growth Index measures the performance of those Russell 2000 companies with higher price/book ratios and higher predicted and historical growth rates.
The ETF has added about 8.82% so far this year and is down about -7.53% in the last one year (as of 02/28/2023). In the past 52-week period, it has traded between $141.31 and $192.14.
The ETF has a beta of 1.15 and standard deviation of 32.50% for the trailing three-year period, making it a high risk choice in the space. With about 1117 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Russell 2000 Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VTWG is an excellent option for investors seeking exposure to the Style Box - Small Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Growth ETF (IWO - Free Report) and the Vanguard Small-Cap Growth ETF (VBK - Free Report) track a similar index. While iShares Russell 2000 Growth ETF has $9.64 billion in assets, Vanguard Small-Cap Growth ETF has $13.16 billion. IWO has an expense ratio of 0.23% and VBK charges 0.07%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should Vanguard Russell 2000 Growth ETF (VTWG) Be on Your Investing Radar?
Designed to provide broad exposure to the Small Cap Growth segment of the US equity market, the Vanguard Russell 2000 Growth ETF (VTWG - Free Report) is a passively managed exchange traded fund launched on 09/22/2010.
The fund is sponsored by Vanguard. It has amassed assets over $711.61 million, making it one of the average sized ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.65%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Healthcare sector--about 21.40% of the portfolio. Information Technology and Industrials round out the top three.
Looking at individual holdings, Shockwave Medical Inc. (SWAV - Free Report) accounts for about 0.74% of total assets, followed by Halozyme Therapeutics Inc. (HALO - Free Report) and Emcor Group Inc. (EME - Free Report) .
Performance and Risk
VTWG seeks to match the performance of the Russell 2000 Growth Index before fees and expenses. The Russell 2000 Growth Index measures the performance of those Russell 2000 companies with higher price/book ratios and higher predicted and historical growth rates.
The ETF has added about 8.82% so far this year and is down about -7.53% in the last one year (as of 02/28/2023). In the past 52-week period, it has traded between $141.31 and $192.14.
The ETF has a beta of 1.15 and standard deviation of 32.50% for the trailing three-year period, making it a high risk choice in the space. With about 1117 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Russell 2000 Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VTWG is an excellent option for investors seeking exposure to the Style Box - Small Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Growth ETF (IWO - Free Report) and the Vanguard Small-Cap Growth ETF (VBK - Free Report) track a similar index. While iShares Russell 2000 Growth ETF has $9.64 billion in assets, Vanguard Small-Cap Growth ETF has $13.16 billion. IWO has an expense ratio of 0.23% and VBK charges 0.07%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.