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Should Vanguard Russell 2000 ETF (VTWO) Be on Your Investing Radar?
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Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the Vanguard Russell 2000 ETF (VTWO - 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 $9.35 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
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.
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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.10%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.36%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 17.40% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Super Micro Computer Inc (SMCI - Free Report) accounts for about 1.72% of total assets, followed by Microstrategy Inc (MSTR - Free Report) and Comfort Systems Usa Inc (FIX - 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 has gained about 9.22% so far this year and was up about 13.35% in the last one year (as of 07/25/2024). In the past 52-week period, it has traded between $65.62 and $90.77.
The ETF has a beta of 1.15 and standard deviation of 22.65% for the trailing three-year period, making it a medium risk choice in the space. With about 1954 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Russell 2000 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, VTWO is a good option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
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 $69.51 billion in assets, iShares Core S&P Small-Cap ETF has $83.42 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?
Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the Vanguard Russell 2000 ETF (VTWO - 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 $9.35 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
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.
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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.10%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.36%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 17.40% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Super Micro Computer Inc (SMCI - Free Report) accounts for about 1.72% of total assets, followed by Microstrategy Inc (MSTR - Free Report) and Comfort Systems Usa Inc (FIX - 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 has gained about 9.22% so far this year and was up about 13.35% in the last one year (as of 07/25/2024). In the past 52-week period, it has traded between $65.62 and $90.77.
The ETF has a beta of 1.15 and standard deviation of 22.65% for the trailing three-year period, making it a medium risk choice in the space. With about 1954 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Russell 2000 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, VTWO is a good option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
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 $69.51 billion in assets, iShares Core S&P Small-Cap ETF has $83.42 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.