Vanguard Russell 2000 ETF

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Why Investors Earn Less Than Their Funds, and the Small-Cap Surge
Yahoo Finance· 2025-10-03 19:55
Robert Brokamp: Why investors earn less than their funds and the small-cap surge? This is the Saturday Personal Finance edition of Motley Fool Money. I'm Robert Brokamp. This week, I speak with Morningstar's, Jeff Ptak, about research which finds that fund investors earn lower returns than the funds themselves. But first, let's hit a few highlights from last week in Money. The overall stock market has spent the past year and a half hitting new all time highs. It did run into a significant speed bump earlier ...
1 No-Brainer Vanguard Index ETF to Buy Right Now for Less Than $1,000
The Motley Fool· 2025-09-28 08:39
Core Viewpoint - The S&P 500 remains a solid investment option, but there are strategic reasons to consider diversifying into other index funds, particularly small-cap ETFs like the Vanguard S&P Small-Cap 600 ETF and the Vanguard Russell 2000 ETF [1][2]. Group 1: Small-Cap Performance - Small-cap stocks, represented by the Vanguard S&P Small-Cap 600 ETF, have a history of solid performance, with market caps typically between $300 million and $2 billion [4]. - The average market cap of the S&P 500 Large Cap Index is approximately $370 billion, highlighting the significant difference in scale between small-cap and large-cap stocks [5]. - Small companies often have the potential for substantial growth, as evidenced by Kratos Defense & Security Solutions and Hims & Hers Health, which have transitioned to larger indices due to their growth [6]. Group 2: Market Trends and Analysis - Small caps have been underperforming compared to large caps, largely due to the rise of AI, which has significantly benefited larger technology companies [9]. - The current period marks the 15th year of large-cap outperformance, which is notable as the average cycle lasts about 11 years [11]. - Analysts from Bank of America Merrill Lynch suggest that small-cap stocks tend to outperform large caps following Fed interest rate cuts, with small caps recently showing their first quarter of positive year-over-year earnings growth since Q3 2022 [12]. Group 3: Valuation and Future Outlook - The S&P 600's forward-looking price-to-earnings ratio is 15.7, below its long-term average, contrasting with the S&P 500's P/E of 22.6, which is above its historical norm [12]. - A potential shift from expensive large caps to undervalued small caps may occur, driven by market recognition of these dynamics [13]. - Small caps have reported their first quarterly earnings growth since Q3 2022, and projections indicate continued improvement in earnings through at least the end of next year [16].
Is the Vanguard Russell 2000 ETF a Buy Now?
The Motley Fool· 2025-09-23 08:42
Group 1: ETF Overview - The Vanguard Russell 2000 ETF (VTWO) has reached a record high and has shown more momentum than the S&P 500 over the last three months [1] - The ETF has a low annual expense ratio of 0.07%, significantly lower than the average of 0.97% for similar funds [2] - It aims to track the performance of the Russell 2000 index, which includes approximately 2,000 small-cap stocks [3] Group 2: Current Performance and Market Conditions - The ETF currently holds 1,999 stocks, with no single stock exceeding 0.64% of the total portfolio, minimizing the impact of any single stock's poor performance [4] - Recent gains in the ETF are attributed to anticipation of interest rate cuts by the Federal Reserve, with a 0.25% cut announced on September 17, 2025 [7] - Small-cap stocks are more sensitive to interest rates, making them potentially more responsive to further rate cuts, which could benefit the ETF [8] Group 3: Valuation and Historical Performance - The Vanguard Russell 2000 ETF has a price-to-earnings (P/E) ratio of 18.6, compared to the S&P 500's higher P/E ratio of 30.85, indicating better valuation [9] - Historically, small-cap stocks have outperformed large-cap stocks over the long term, although the Vanguard Russell 2000 has returned around 143% over the last 10 years, compared to 304% for the S&P 500 [10] Group 4: Potential Challenges - The U.S. economy is facing challenges, including a weakening employment picture, which could negatively impact smaller companies more than larger ones [12] - The demand for artificial intelligence (AI) has favored large-cap stocks, which may continue to outperform small-cap stocks in the near future [13] - Despite these challenges, the Vanguard Russell 2000 ETF is still viewed as a good investment option at this time [14]
VTWO: The Upcoming Challenges For Small Caps
Seeking Alpha· 2025-07-22 15:34
Core Insights - The Vanguard Russell 2000 ETF (NASDAQ: VTWO) provides exposure to the mid-cap segment of the U.S. equity market and was launched on September 20, 2010 [1] - The ETF has an expense ratio of 0.07% and manages approximately $13 billion in assets [1] Company Overview - The Vanguard Group, Inc. is the managing entity of the Vanguard Russell 2000 ETF [1]