The Vanguard Russell 2000 ETF (VTWO) was launched on 09/22/2010, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.

The fund is sponsored by Vanguard. It has amassed assets over $12.76 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

There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even 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 1.18%.

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 18.90% of the portfolio. Industrials and Healthcare round out the top three.

Looking at individual holdings, Slbbh1142 accounts for about 1.45% of total assets, followed by Ftai Aviation Ltd (FTAI) and Vaxcyte Inc (PCVX).

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 return is roughly 21.15% so far this year and it's up approximately 36.47% in the last one year (as of 11/28/2024). In the past 52-week period, it has traded between $72.36 and $98.06.

The ETF has a beta of 1.14 and standard deviation of 23.17% for the trailing three-year period, making it a medium risk choice in the space. With about 1992 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 a great 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.