Should Vanguard Russell 2000 ETF (VTWO) Be on Your Investing Radar?

Launched on September 22, 2010, the Vanguard Russell 2000 ETF (VTWO) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Blend segment of the US equity market.The fund is sponsored by Vanguard. It has amassed assets over $13.17 billion, making it one of the largest ETFs attempting to match the Small Cap Blend segment of the US equity market.Why Small Cap BlendSitting 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. CostsExpense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.It has a 12-month trailing dividend yield of 1.19%.Sector Exposure and Top HoldingsIt is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation to the Industrials sector -- about 18% of the portfolio. Financials and Information Technology round out the top three.Looking at individual holdings, Slbbh1142 accounts for about 2.57% of total assets, followed by Credo Technology Group Holding Ltd (CRDO) and Fabrinet (FN).Performance and RiskVTWO 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 added about 11.43% so far this year and is up about 13.54% in the last one year (as of 10/08/2025). In the past 52-week period, it has traded between $70.56 and $99.77.The ETF has a beta of 1.13 and standard deviation of 21.49% for the trailing three-year period, making it a medium risk choice in the space. With about 1993 holdings, it effectively diversifies company-specific risk.AlternativesVanguard 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 $69.49 billion in assets, iShares Core S&P Small-Cap ETF has $85.66 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.Bottom-LineAn 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Vanguard Russell 2000 ETF (VTWO): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks