Should Vanguard Russell 2000 Value ETF (VTWV) Be on Your Investing Radar?
The Vanguard Russell 2000 Value ETF (VTWV) was launched on 09/22/2010, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $758.47 million, making it one of the average sized ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
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.
Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
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 2.31%.
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 Financials sector--about 25% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Agree Realty Corp. (ADC) accounts for about 0.50% of total assets, followed by Selective Insurance Group Inc. (SIGI) and Southstate Corp. (SSB).
Performance and Risk
VTWV seeks to match the performance of the Russell 2000 Value Index before fees and expenses. The Russell 2000 Value Index measures the performance of the small-cap value segment of the U.S. equity universe.
The ETF has lost about -5.56% so far this year and is down about -11.77% in the last one year (as of 05/04/2023). In the past 52-week period, it has traded between $113.26 and $139.82.
The ETF has a beta of 1.15 and standard deviation of 25.99% for the trailing three-year period, making it a medium risk choice in the space. With about 1373 holdings, it effectively diversifies company-specific risk.
Vanguard Russell 2000 Value 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, VTWV is a great option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Value ETF (IWN) and the Vanguard Small-Cap Value ETF (VBR) track a similar index. While iShares Russell 2000 Value ETF has $10.65 billion in assets, Vanguard Small-Cap Value ETF has $23.13 billion. IWN has an expense ratio of 0.23% and VBR charges 0.07%.
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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Vanguard Russell 2000 Value ETF (VTWV): ETF Research Reports
Selective Insurance Group, Inc. (SIGI) : Free Stock Analysis Report
Agree Realty Corporation (ADC) : Free Stock Analysis Report
Vanguard Small-Cap Value ETF (VBR): ETF Research Reports
iShares Russell 2000 Value ETF (IWN): ETF Research Reports
SouthState Corp. (SSB) : Free Stock Analysis Report
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