Ought to Vanguard Russell 2000 Worth ETF (VTWV) Be on Your Investing Radar?

On the lookout for broad publicity to the Small Cap Worth section of the US fairness market? It is best to contemplate the Vanguard Russell 2000 Worth ETF (VTWV), a passively managed change traded fund launched on 09/22/2010.

The fund is sponsored by Vanguard. It has amassed property over $838.08 million, making it one of many common sized ETFs making an attempt to match the Small Cap Worth section of the US fairness market.

Why Small Cap Worth

Sitting at a market capitalization under $2 billion, small cap firms are usually high-potential shares in comparison with its massive and mid cap counterparts, however include increased threat.

Worth shares are identified for his or her decrease than common price-to-earnings and price-to-book ratios, however traders also needs to observe their decrease than common gross sales and earnings progress charges. Whereas worth shares have outperformed progress shares in practically all markets when you think about long-term efficiency, progress shares usually tend to outpace worth shares in sturdy bull markets.

Prices

When contemplating an ETF’s whole return, expense ratios are an essential issue, and cheaper funds can considerably outperform their dearer counterparts in the long run if all different components stay equal.

Annual working bills for this ETF are 0.15%, making it one of many least costly merchandise within the area.

It has a 12-month trailing dividend yield of 1.74%.

Sector Publicity and Prime Holdings

Although ETFs supply diversified publicity which minimizes single inventory threat, it’s nonetheless essential to look right into a fund’s holdings earlier than investing. Fortunately, most ETFs are very clear merchandise that disclose their holdings each day.

This ETF has heaviest allocation to the Financials sector–about 29.30% of the portfolio. Industrials and Actual Property spherical out the highest three.

particular person holdings, Slbbh1142 accounts for about 0.80% of whole property, adopted by Southstate Corp (SSB) and Jackson Monetary Inc (JXN).

Efficiency and Danger

VTWV seeks to match the efficiency of the Russell 2000 Worth Index earlier than charges and bills. The Russell 2000 Worth Index measures the efficiency of the small-cap worth section of the U.S. fairness universe.

The ETF has gained about 2.10% thus far this 12 months and is up about 12.82% within the final one 12 months (as of 01/23/2025). Up to now 52-week interval, it has traded between $128.45 and $159.92.

The ETF has a beta of 1.17 and customary deviation of twenty-two.19% for the trailing three-year interval, making it a medium threat selection within the area. With about 1443 holdings, it successfully diversifies company-specific threat.

Alternate options

Vanguard Russell 2000 Worth ETF holds a Zacks ETF Rank of two (Purchase), which is predicated on anticipated asset class return, expense ratio, and momentum, amongst different components. Due to this, VTWV is an excellent choice for traders in search of publicity to the Model Field – Small Cap Worth section of the market. There are different further ETFs within the area that traders might contemplate as nicely.

The Avantis U.S. Small Cap Worth ETF (AVUV) and the Vanguard Small-Cap Worth ETF (VBR) observe the same index. Whereas Avantis U.S. Small Cap Worth ETF has $16.08 billion in property, Vanguard Small-Cap Worth ETF has $32.42 billion. AVUV has an expense ratio of 0.25% and VBR fees 0.07%.

Backside-Line

Retail and institutional traders more and more flip to passively managed ETFs as a result of they provide low prices, transparency, flexibility, and tax effectivity; these type of funds are additionally glorious automobiles for long run traders.

To be taught extra about this product and different ETFs, display for merchandise that match your funding targets and browse articles on newest developments within the ETF investing universe, please go to Zacks ETF Center.