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The Vanguard Russell 2000 Index Fund ETF Shares (VTWO) was launched on September 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.
Millions of retirement portfolios hold small-cap funds on the promise that extra risk earns extra reward over time. That bargain deserves a hard look at what actually happened across the last decade.
The Vanguard Russell 2000 ETF is rated "hold" due to less favorable risk-reward versus mid-caps amid tightening monetary policy. VTWO's recent outperformance is driven largely by multiple expansion, not sustainable earnings growth, with 29% of constituents unprofitable. Small-cap stocks face higher floating-rate debt exposure (30%) than the S&P 500 (7%), increasing vulnerability to rising rates.
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Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the Vanguard Russell 2000 Index Fund ETF Shares (VTWO) is a passively managed exchange traded fund launched on September 22, 2010.
I recommended that my son choose low-cost index funds for his 401(k). The four stock ETFs shown here own a combined 7,415 stocks with expense ratios of 0.02% to 0.07%.