Yahoo Finance Should Vanguard Russell 2000 ETF (VTWO) Be on Your Investing Radar?
Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the Vanguard Russell 2000 ETF (VTWO) is a passively managed exchange traded fund launched on 09/22/2010.
The fund is sponsored by Vanguard. It has amassed assets over $5.65 billion, making it one of the largest ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 1.62%.
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 17.90% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Iridium Communications Inc. (IRDM) accounts for about 0.31% of total assets, followed by Emcor Group Inc. (EME) and Inspire Medical Systems Inc. (INSP).
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 has lost about -0.09% so far this year and is up roughly 0.95% in the last one year (as of 05/10/2023). In the past 52-week period, it has traded between $66.31 and $81.11.
The ETF has a beta of 1.15 and standard deviation of 25.08% 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 2 (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) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $47.46 billion in assets, iShares Core S&P Small-Cap ETF has $63.53 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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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Vanguard Russell 2000 ETF (VTWO): ETF Research Reports
EMCOR Group, Inc. (EME) : Free Stock Analysis Report
Iridium Communications Inc (IRDM) : Free Stock Analysis Report
iShares Russell 2000 ETF (IWM): ETF Research Reports
iShares Core S&P Small-Cap ETF (IJR): ETF Research Reports
Inspire Medical Systems, Inc. (INSP) : Free Stock Analysis Report
