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

Designed to offer broad publicity to the Small Cap Worth section of the US fairness market, the Vanguard Russell 2000 Worth ETF (VTWV) is a passively managed trade traded fund launched on 09/22/2010.

The fund is sponsored by Vanguard. It has amassed belongings over $806.66 million, making it one of many common sized ETFs trying 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 typically high-potential shares in comparison with its massive and mid cap counterparts, however include larger threat.

Whereas worth shares have decrease than common price-to-earnings and price-to-book ratios, additionally they have decrease than common gross sales and earnings development charges. Taking a look at their long-term efficiency, worth shares have outperformed development shares in nearly all markets. They’re nevertheless prone to underperform development shares in robust bull markets.

Prices

Value is a crucial consider deciding on the best ETF, and cheaper funds can considerably outperform their costlier counterparts if all different fundamentals are the identical.

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

It has a 12-month trailing dividend yield of 1.85%.

Sector Publicity and High Holdings

Regardless that ETFs provide diversified publicity that minimizes single inventory threat, traders also needs to have a look at the precise holdings contained in the fund. Fortunately, most ETFs are very clear merchandise that disclose their holdings every day.

This ETF has heaviest allocation to the Financials sector–about 28% of the portfolio. Actual Property and Industrials spherical out the highest three.

Taking a look at particular person holdings, Slbbh1142 accounts for about 0.67% of complete belongings, adopted by Southstate Corp (SSB) and Meritage Properties Corp (MTH).

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 8.67% to date this yr and it is up roughly 22.09% within the final one yr (as of 09/19/2024). Prior to now 52-week interval, it has traded between $110.31 and $150.96.

The ETF has a beta of 1.14 and commonplace deviation of twenty-two.23% for the trailing three-year interval, making it a medium threat selection within the house. With about 1451 holdings, it successfully diversifies company-specific threat.

Options

Vanguard Russell 2000 Worth ETF holds a Zacks ETF Rank of two (Purchase), which relies on anticipated asset class return, expense ratio, and momentum, amongst different components. Due to this, VTWV is an impressive 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 house that traders might contemplate as nicely.

The Avantis U.S. Small Cap Worth ETF (AVUV) and the Vanguard Small-Cap Worth ETF (VBR) observe an analogous index. Whereas Avantis U.S. Small Cap Worth ETF has $13.29 billion in belongings, Vanguard Small-Cap Worth ETF has $30.05 billion. AVUV has an expense ratio of 0.25% and VBR expenses 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 form 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 skim articles on newest developments within the ETF investing universe, please go to Zacks ETF Center.