IWM vs VTWO
iShares Russell 2000 ETF vs Vanguard Russell 2000 ETF
Quick Verdict
VTWO has a lower expense ratio. VTWO delivered stronger 1-year returns. VTWO offers more diversification with 1943 holdings.
Side-by-Side Comparison
| Metric | IWM | VTWO | Winner |
|---|---|---|---|
| Expense Ratio | 0.19% | 0.06% | |
| AUM | $79.5B | $17.9B | |
| Dividend Yield | 0.88% | 1.39% | |
| Holdings | 1,996 | 1,970 | |
| YTD Return | +22.18% | +22.34% | |
| 1Y Return | +34.85% | +35.15% | |
| 3Y Return (annualized) | +18.08% | +18.28% | |
| 5Y Return (annualized) | +7.62% | +7.81% | |
| Volatility (annualized) | 20.0% | 19.1% | |
| Max Drawdown | -59.9% | -42.4% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | May 22, 2000 | Sep 20, 2010 |
IWM vs VTWO Performance
iShares Russell 2000 ETF (IWM) is a ETF from iShares by BlackRock (US) and Vanguard Russell 2000 ETF (VTWO) is a ETF from Vanguard (US). Over the past year IWM returned +34.85% while VTWO returned +35.15%. Year to date, IWM is up 22.18% versus a gain of 22.34% for VTWO.
Over three years, IWM compounded at +18.08% per year against +18.28% for VTWO; over five years the annualized figures are +7.62% and +7.81% respectively. Across the full 16-year window we track, VTWO has the edge at +10.79% annualized vs +7.75%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
IWM has been the more volatile fund, with annualized monthly volatility of 20.0% compared with 19.1% for VTWO. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -59.9% for IWM and -42.4% for VTWO. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 1.00. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
IWM charges 0.19% per year while VTWO charges 0.06%. On a $10,000 position that is $19 vs $6 annually, a gap of $13 per year that compounds over a long holding period. On income, IWM currently yields 0.88% against 1.39% for VTWO.
Holdings Overlap
IWM and VTWO share 1350 holdings out of 2187 unique holdings combined, representing a 68.7% weight overlap.
High overlap means holding both may not provide much additional diversification.
Frequently Asked Questions
Which is cheaper, IWM or VTWO?
IWM has an expense ratio of 0.19% while VTWO charges 0.06%. VTWO is the cheaper option. On a $10,000 investment, that is $13 per year of difference.
Which performed better, IWM or VTWO?
Over the past year IWM returned +34.85% vs +35.15% for VTWO, so VTWO leads on 1-year performance. Over the longest common window we track (16 years), IWM annualized +7.75% vs +10.79% for VTWO. Past performance does not guarantee future results.
Which is riskier, IWM or VTWO?
IWM has been the more volatile fund at 20.0% annualized versus 19.1% for VTWO. Worst drawdown: IWM -59.9% vs VTWO -42.4%.
Should I hold both IWM and VTWO?
IWM and VTWO have a monthly-return correlation of 1.00, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between IWM and VTWO?
IWM and VTWO share 1350 common holdings with a 68.7% weight overlap. Combined, they hold 2187 unique securities.
Which pays a higher dividend, IWM or VTWO?
IWM yields 0.88% while VTWO yields 1.39%, so VTWO currently pays the higher dividend yield.
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