Looking for broad exposure to the Small Cap Value segment of the US equity market? You should consider the Vanguard Russell 2000 Value ETF (VTWV), a passively managed exchange traded fund launched on 09/22/2010.
The fund is sponsored by Vanguard. It has amassed assets over $838.08 million, 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
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.74%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 29.30% of the portfolio. Industrials and Real Estate round out the top three.
Looking at individual holdings, Slbbh1142 accounts for about 0.80% of total assets, followed by Southstate Corp (SSB) and Jackson Financial Inc (JXN).
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 gained about 2.10% so far this year and is up about 12.82% in the last one year (as of 01/23/2025). In the past 52-week period, it has traded between $128.45 and $159.92.
The ETF has a beta of 1.17 and standard deviation of 22.19% for the trailing three-year period, making it a medium risk choice in the space. With about 1443 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Russell 2000 Value ETF 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 outstanding 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 Avantis U.S. Small Cap Value ETF (AVUV) and the Vanguard Small-Cap Value ETF (VBR) track a similar index. While Avantis U.S. Small Cap Value ETF has $16.08 billion in assets, Vanguard Small-Cap Value ETF has $32.42 billion. AVUV has an expense ratio of 0.25% and VBR charges 0.07%.
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 ETF (VTWV): ETF Research Reports
Vanguard Small-Cap Value ETF (VBR): ETF Research Reports
SouthState Corporation (SSB) : Free Stock Analysis Report
Avantis U.S. Small Cap Value ETF (AVUV): ETF Research Reports
Jackson Financial Inc. (JXN) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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