Vanguard Russell 2000 ETF

Vanguard Russell 2000 ETF (VTWO) is an index fund that tracks the Russell 2000 Index, a measure of small US companies. As of August 31, 2026, it held 1,998 stocks. Its 0.07% annual expense ratio is well below the 0.19% charged by the much larger iShares Russell 2000 ETF (IWM). It is also widely spread out: its 10 largest holdings made up only about 3% of assets.

• Over the year to Oct 30, 2026, VTWO returned +15.4%, 3rd of 9 among similar funds.
• Its 5-year annualized return was +5.6% and its 10-year +10.5%.
• In the 2020 COVID crash it fell 40.9% and regained its old high 7.6 months after the low.
• Its worst full calendar year was 2022 (-20.5%); its best was 2013 (+38.0%).
• The deepest fall in its price history was 41.2% (Jan 16, 2020 to Mar 23, 2020), recovered by Nov 9, 2020.

As of Aug 31, 2026, the fund held 1,998 securities; the ten largest made up 3.15% of assets, and 2.31% sat in cash and money-market holdings.

• Over the three months to Aug 31, 2026, investors added a net $173.7M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +3.75%, -3.03%, +0.99%.

VTWO is the exchange-traded share class of Vanguard Russell 2000 Index Fund. No manager picks stocks. The fund follows the Russell 2000 Index, which measures small-capitalization US stocks. "Small-cap" means companies whose shares have a relatively small total market value. The fund aims to own all, or nearly all, of the index's stocks, each in roughly the same proportion as in the index. Under normal conditions, at least 80% of net assets must be in index stocks.

As of August 31, 2026, no single holding was large. The biggest were JFrog (0.35%), Moog (0.34%), UMB Financial (0.33%), Glaukos (0.33%) and Brinker International (0.32%), and the top 10 together came to about 3.15%. Cash was about 2.31%. The fund also held a Russell 2000 futures contract and a swap, both with near-zero weight. Index funds often use tools like these to keep cash invested. Turnover, the share of the portfolio replaced over a year, was 14%. Because the fund tracks the index whether it rises or falls, it won't sidestep falling stocks.

Individual investors buy and sell shares on Nasdaq at market prices. These can differ slightly from the value of the fund's holdings. Only a few large firms, called authorized participants, can create or redeem shares directly with the fund.

• VTWO charges 0.07% a year, versus an average of 0.22% for the similar funds below (3rd of 9, cheapest first).
• Of that, 0.05% is the management fee; the rest covers other fund expenses.
• Using the prospectus's standard example, $10,000 invested would cost about $7 in the first year and $90 over 10 years (assuming a 5% annual return).

It adds small-company exposure that large-cap funds barely hold, but it has fallen harder and recovered more slowly than a typical core stock fund.

VTWO could add smaller US companies to a portfolio built mostly on large caps, and it costs 0.07% a year. In the SEC's standard example, that comes to about $90 over 10 years on $10,000. The tradeoff is sharper swings. In the 2020 COVID crash it fell about 41% between February 20 and March 23, 2020, then regained its peak by November 9, 2020. In the 2022 bear market it fell about 27% and took roughly 25 months, until July 15, 2024, to recover. Its worst calendar year was 2022, at -20.4%. The fund launched in 2010, so it has no 2008 record. Anyone forced to sell shares in a slump like these could lock in deep losses. Income is modest: the trailing 12-month yield was 1.18% as of October 29, 2026, paid quarterly. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.