Designed to provide broad exposure to the Small Cap Growth segment of the US equity market, the Vanguard Russell 2000 Growth ETF (VTWG Quick QuoteVTWG - Free Report) is a passively managed exchange traded fund launched on September 22, 2010.

The fund is sponsored by Vanguard. It has amassed assets over $1.01 billion, 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.

Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Additionally, growth stocks have a greater level of risk associated with them. 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 0.1%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 0.58%.

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 Information Technology sector -- about 22% of the portfolio. Healthcare and Industrials round out the top three.

Looking at individual holdings, Slbbh1142 accounts for about 1.19% of total assets, followed by Credo Technology Group Holding Ltd (CRDO) and Fabrinet (FN).

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 gained about 1.32% so far this year and it's up approximately 14.35% in the last one year (as of 08/08/2025). In the past 52-week period, it has traded between $163.60 and $229.76.

The ETF has a beta of 1.15 and standard deviation of 23.07% for the trailing three-year period, making it a high risk choice in the space. With about 1114 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard Russell 2000 Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VTWG is a sufficient option for those seeking exposure to the Style Box - Small Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Russell 2000 Growth ETF (IWO) and the Vanguard Small-Cap Growth ETF (VBK) track a similar index. While iShares Russell 2000 Growth ETF has $11.67 billion in assets, Vanguard Small-Cap Growth ETF has $19.21 billion. IWO has an expense ratio of 0.24% 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.