Launched on September 22, 2010, the Vanguard Russell 2000 Value Index Fund ETF Shares (VTWV) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $1.37 billion, making it one of the average sized ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.06%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.58%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector -- about 28.5% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Viasat Inc (VSAT) accounts for about 0.73% of total assets, followed by Cytokinetics Inc (CYTK) and Umb Financial Corp (UMBF).
Performance and Risk
VTWV seeks to match the performance of the Russell 2000 Value Index before fees and expenses. The Russell 2000 Value Index measures the performance of the small-cap value segment of the U.S. equity universe.
The ETF has added roughly 24.95% so far this year and is up roughly 42.31% in the last one year (as of 08/12/2026). In the past 52-week period, it has traded between $146.54 and $200.12.
The ETF has a beta of 1.02 and standard deviation of 20.31% for the trailing three-year period, making it a medium risk choice in the space. With about 1432 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Russell 2000 Value Index Fund ETF Shares holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VTWV is an excellent option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Value ETF (IWN) and the Vanguard Morningstar Small-Cap Value ETF (VBR) track a similar index. While iShares Russell 2000 Value ETF has $14.64 billion in assets, Vanguard Morningstar Small-Cap Value ETF has $38.08 billion. IWN has an expense ratio of 0.24% and VBR charges 0.05%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Vanguard Russell 2000 Value Index Fund ETF Shares (VTWV): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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