VTWO: Low-Cost Way To Get Exposure To Russell 2000 Small Caps

(9min)

Summary

  • VTWO is a low-cost Vanguard ETF tracking the volatile Russell 2000 Small Cap Index, with potential for high returns but also sharp corrections.
  • VTWO's expense ratio is 0.07%, lower than many peers, but SCHA and VB offer even lower fees and are highly correlated alternatives.
  • VTWO has underperformed other small-cap benchmarks due to a high percentage of companies with negative earnings, but it remains a solid core holding.
  • Small caps offer high growth potential, undervaluation, innovation, and diversification benefits, making VTWO a valuable addition to a diversified portfolio.
  • Looking for a portfolio of ideas like this one? Members of Yield Hunting: Alt Inc Opps get exclusive access to our subscriber-only portfolios. Learn More »

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Overall Objective and Strategy

NASDAQ:VTWO is a Vanguard low-cost index ETF that uses a benchmark of the Russell 2000 Small Cap Index.

  • It tries to closely track the index return.

  • The fund is quite volatile, and can generate

George is a contributor to the investing group Yield Hunting: Alternative Income Opportunities, a premium service dedicated to income investors who are searching for yield without the high risk of the equity market. The group manages four portfolios with a range of yield targets, a monthly newsletter, weekly commentary, rankings of CEFs based on yield, trade alerts, and access to chat for questions. Learn more.

This article was written by

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George Spritzer, CFA is a registered investment advisor who specializes in managing closed-end funds for individuals. George also shares his understanding of how to profit from investing with special situations as a catalyst.

George is a contributor to the investing group Yield Hunting: Alt Inc Opps, a premium service dedicated to income investors who are searching for yield without the high risk of the equity market. The group manages four portfolios with a range of yield targets, a monthly newsletter, weekly commentary, rankings of CEFs based on yield, trade alerts, and access to chat for questions. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of SPSM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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About VTWO ETF

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