Should Vanguard Russell 2000 Growth ETF (VTWG) Be on Your Investing Radar?

Looking for broad exposure to the Small Cap Growth segment of the US equity market? You should consider the Vanguard Russell 2000 Growth ETF (VTWG), a passively managed exchange traded fund launched on 09/22/2010.The fund is sponsored by Vanguard. It has amassed assets over $1.05 billion, making it one of the average sized ETFs attempting to match the Small Cap Growth segment of the US equity market.Why Small Cap GrowthSitting 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.Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.CostsCost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.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 0.54%.Sector Exposure and Top HoldingsWhile 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 Healthcare sector--about 23.80% of the portfolio. Industrials and Information Technology round out the top three.Looking at individual holdings, Ftai Aviation Ltd (FTAI) accounts for about 1.14% of total assets, followed by Slbbh1142 and Sprouts Farmers Market Inc (SFM).Performance and RiskVTWG seeks to match the performance of the Russell 2000 Growth Index before fees and expenses. The Russell 2000 Growth Index measures the performance of those Russell 2000 companies with higher price/book ratios and higher predicted and historical growth rates.The ETF has gained about 3.04% so far this year and is up roughly 18.76% in the last one year (as of 01/30/2025). In the past 52-week period, it has traded between $177.52 and $229.76.The ETF has a beta of 1.17 and standard deviation of 24.52% for the trailing three-year period, making it a high risk choice in the space. With about 1126 holdings, it effectively diversifies company-specific risk.AlternativesVanguard Russell 2000 Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VTWG is a sufficient option for those seeking exposure to the Style Box - Small Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.The iShares Russell 2000 Growth ETF (IWO) and the Vanguard Small-Cap Growth ETF (VBK) track a similar index. While iShares Russell 2000 Growth ETF has $12.84 billion in assets, Vanguard Small-Cap Growth ETF has $20.29 billion. IWO has an expense ratio of 0.24% and VBK charges 0.07%.Bottom-LineAn increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Vanguard Russell 2000 Growth ETF (VTWG): ETF Research Reports Sprouts Farmers Market, Inc. (SFM): Free Stock Analysis Report iShares Russell 2000 Growth ETF (IWO): ETF Research Reports FTAI Aviation Ltd. (FTAI): Free Stock Analysis Report Vanguard Small-Cap Growth ETF (VBK): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks