Average Daily Volume
1.94M
Fund Overview
The Vanguard Russell 2000 ETF (VTWO) is designed to track the performance of the Russell 2000 Index, which measures the investment return of small-capitalization stocks in the United States. The Russell 2000 Index is a subset of the broader Russell 3000 Index and represents approximately 10% of the total market capitalization of the U.S. equity market. VTWO provides investors with exposure to small-cap companies, which are often in the early stages of growth and may offer higher growth potential compared to large-cap stocks. The fund is passively managed, aiming to replicate the index's performance with low expense ratios, making it a cost-effective option for investors seeking small-cap exposure.
- Asset Class
-
Equity
- Industry
-
N/A
- Annual Dividend Rate
-
- Smart Beta
-
No
- Leveraged / Inverse
-
N/A / No
- Dividend Quality - Yield
-
- 1.26 %
- Currency Hedged
-
No
- Portfolio Turnover
-
12 %
- Dividend Date
-
Why Invest in the VTWO ETF?
Potential Benefits
- Provides diversified exposure to small-cap U.S. stocks, which historically have higher growth potential than large-cap stocks.
- Low expense ratio compared to actively managed small-cap funds, reducing costs for long-term investors.
- Passively managed, aiming to closely track the Russell 2000 Index with minimal tracking error.
- Offers liquidity and transparency, as it holds all or a representative sample of the index constituents.
Potential Risks
- Small-cap stocks are generally more volatile than large-cap stocks, leading to higher price fluctuations.
- Economic downturns can disproportionately impact small-cap companies due to their limited resources.
- Sector concentration risks, as the Russell 2000 may be overweight in certain industries like financials or healthcare.
- Limited international exposure, as the fund focuses solely on U.S. small-cap equities.
RSI data unavailable or insufficient history.
Monthly Returns (%)
| Year |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
| 2026 |
+5.4%
|
+0.8%
|
-5.0%
|
+12.1%
|
+4.4%
|
+3.7%
|
-3.0%
|
+0.9%
|
-5.2%
|
+1.3%
|
-
|
-
|
| 2025 |
+2.5%
|
-5.2%
|
-6.8%
|
-2.4%
|
+5.4%
|
+5.4%
|
+1.7%
|
+7.2%
|
+3.2%
|
+1.8%
|
+1.0%
|
-0.7%
|
| 2024 |
-3.9%
|
+5.6%
|
+3.6%
|
-6.9%
|
+5.1%
|
-1.1%
|
+10.5%
|
-1.8%
|
+0.8%
|
-1.5%
|
+11.2%
|
-8.4%
|
| 2023 |
+9.8%
|
-1.7%
|
-4.8%
|
-1.8%
|
-0.9%
|
+8.1%
|
+6.2%
|
-5.1%
|
-5.9%
|
-6.8%
|
+9.1%
|
+12.2%
|
| 2022 |
-9.8%
|
+1.1%
|
+1.3%
|
-9.8%
|
+0.1%
|
-8.3%
|
+10.5%
|
-2.0%
|
-9.6%
|
+11.2%
|
+2.1%
|
-6.4%
|
| 2021 |
+4.9%
|
+6.1%
|
+1.4%
|
+1.9%
|
+0.3%
|
+1.8%
|
-3.6%
|
+2.2%
|
-2.8%
|
+4.3%
|
-4.2%
|
+2.2%
|
| 2020 |
-3.2%
|
-8.3%
|
-21.9%
|
+13.8%
|
+6.5%
|
+3.5%
|
+3.0%
|
+5.5%
|
-3.3%
|
+2.3%
|
+18.4%
|
+8.6%
|
| 2019 |
+11.5%
|
+5.1%
|
-2.1%
|
+3.4%
|
-7.8%
|
+6.9%
|
+0.8%
|
-5.0%
|
+2.1%
|
+2.7%
|
+4.1%
|
+2.9%
|
| 2018 |
+2.7%
|
-3.8%
|
+1.1%
|
+1.1%
|
+6.1%
|
+0.7%
|
+1.6%
|
+4.4%
|
-2.4%
|
-10.9%
|
+1.6%
|
-12.0%
|
| 2017 |
+0.4%
|
+1.9%
|
+0.1%
|
+1.1%
|
-2.0%
|
+3.4%
|
+0.8%
|
-1.2%
|
+6.3%
|
+0.7%
|
+3.0%
|
-0.5%
|
< -5%
-5% to -2%
-2% to 0%
0%
0% to +2%
+2% to +5%
> +5%
Top Holdings (by weight)
| Symbol |
Company Name |
Weight |
|
SFM
|
SPROUTS FARMERS MARKET INC |
0.6 % |
|
INSM
|
INSMED INC |
0.5 % |
|
FTAI
|
FTAI AVIATION LTD |
0.5 % |
|
CRS
|
CARPENTER TECHNOLOGY CORP |
0.4 % |
|
SSB
|
SOUTHSTATE CORP |
0.4 % |
|
AIT
|
APPLIED INDUSTRIAL TECHNOLOGIES INC |
0.4 % |
|
HQY
|
HEALTHEQUITY INC |
0.4 % |
|
MLI
|
MUELLER INDUSTRIES INC |
0.3 % |
|
PCVX
|
VAXCYTE INC ORDINARY SHARES |
0.3 % |
|
HIMS
|
n/a |
0.3 % |
Top 10 holdings shown, out of 1 total holdings.
Related ETFs: VTWO vs Peers
Comparison highlights key differences on cost, coverage, and focus within sector ETFs.
Investment Strategy
VTWO is a passively managed ETF that seeks to track the performance of the Russell 2000 Index. The index is market-cap weighted, meaning larger small-cap companies have a greater influence on its performance. The fund primarily holds common stocks of U.S. small-cap companies, aiming for full replication or a representative sample of the index. Rebalancing occurs periodically to align with the index's composition, which is reconstituted annually. The strategy emphasizes low turnover and cost efficiency, making it suitable for long-term investors.
Frequently Asked Questions
What is the difference between VTWO and VB?
VTWO tracks the Russell 2000 Index, focusing exclusively on small-cap stocks, while VB (Vanguard Small-Cap ETF) tracks the CRSP US Small Cap Index, which includes a broader range of small-cap companies. VB may have slightly different sector weightings and performance characteristics.
How often is the Russell 2000 Index reconstituted?
The Russell 2000 Index is reconstituted annually in June, with quarterly updates to account for significant market changes like IPOs or delistings.
Does VTWO pay dividends?
Yes, VTWO pays quarterly dividends, as many small-cap companies in the Russell 2000 Index distribute dividends to shareholders.
Is VTWO suitable for short-term trading?
While VTWO is liquid, small-cap stocks are volatile, making it better suited for long-term investors who can tolerate market fluctuations.
Industry Overview
The Vanguard Russell 2000 ETF (VTWO) provides exposure to the small-cap segment of the U.S. equity market. Small-cap stocks are typically defined as companies with market capitalizations between $300 million and $2 billion. These companies are often in the growth phase, offering higher potential returns but also greater volatility compared to large-cap stocks. Investing in small caps can diversify a portfolio and capture early-stage growth opportunities, though it requires a higher risk tolerance. VTWO tracks the Russell 2000 Index, a widely followed benchmark for small-cap performance.
Alternative Comparison
Compared to the iShares Russell 2000 ETF (IWM), VTWO offers a lower expense ratio, making it a more cost-effective choice for small-cap exposure. While both track the same index, VTWO's lower fees may result in slightly better long-term returns. Another peer, the iShares Core S&P Small-Cap ETF (IJR), tracks the S&P SmallCap 600 Index, which has stricter liquidity and profitability requirements than the Russell 2000. IJR may exhibit slightly less volatility but could miss some high-growth opportunities present in the Russell 2000. Investors should weigh expense ratios, index methodology, and historical performance when choosing between these funds.
Issuer Overview
Vanguard is one of the world's largest investment management companies, known for its low-cost index funds and ETFs. Founded in 1975, Vanguard operates under a unique mutual ownership structure, meaning the funds are owned by their shareholders. This structure allows Vanguard to offer competitively priced investment products. The company is a pioneer in passive investing, with a strong reputation for transparency, investor-focused policies, and long-term performance.
Conclusion
The Vanguard Russell 2000 ETF (VTWO) is a solid choice for investors seeking cost-effective, diversified exposure to U.S. small-cap stocks. Its low expense ratio and passive management style align with Vanguard's reputation for investor-friendly products. While small-cap investing carries higher volatility, VTWO provides a straightforward way to access this segment of the market. Investors should consider their risk tolerance and long-term objectives before allocating to small-cap equities.
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