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Should Vanguard Russell 2000 ETF (VTWO) Be on Your Investing Radar?
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The Vanguard Russell 2000 ETF (VTWO - Free Report) was launched on 09/22/2010, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $6.32 billion, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.49%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 17.30% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Iridium Communications Inc. (IRDM - Free Report) accounts for about 0.31% of total assets, followed by Emcor Group Inc. (EME - Free Report) and Inspire Medical Systems Inc. (INSP - Free Report) .
Performance and Risk
VTWO seeks to match the performance of the Russell 2000 Index before fees and expenses. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe.
The ETF return is roughly 10.80% so far this year and it's up approximately 13.67% in the last one year (as of 07/13/2023). In the past 52-week period, it has traded between $66.63 and $81.11.
The ETF has a beta of 1.15 and standard deviation of 23.82% for the trailing three-year period, making it a medium risk choice in the space. With about 1936 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Russell 2000 ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VTWO is an excellent option for investors seeking exposure to the Style Box - Small Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P Small-Cap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $55.88 billion in assets, iShares Core S&P Small-Cap ETF has $70.52 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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 ETF (VTWO) Be on Your Investing Radar?
The Vanguard Russell 2000 ETF (VTWO - Free Report) was launched on 09/22/2010, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $6.32 billion, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.49%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 17.30% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Iridium Communications Inc. (IRDM - Free Report) accounts for about 0.31% of total assets, followed by Emcor Group Inc. (EME - Free Report) and Inspire Medical Systems Inc. (INSP - Free Report) .
Performance and Risk
VTWO seeks to match the performance of the Russell 2000 Index before fees and expenses. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe.
The ETF return is roughly 10.80% so far this year and it's up approximately 13.67% in the last one year (as of 07/13/2023). In the past 52-week period, it has traded between $66.63 and $81.11.
The ETF has a beta of 1.15 and standard deviation of 23.82% for the trailing three-year period, making it a medium risk choice in the space. With about 1936 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Russell 2000 ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VTWO is an excellent option for investors seeking exposure to the Style Box - Small Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P Small-Cap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $55.88 billion in assets, iShares Core S&P Small-Cap ETF has $70.52 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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.