VOO vs VTWO
Vanguard S&P 500 ETF vs Vanguard Russell 2000 ETF
Quick Verdict
VOO has a lower expense ratio. VTWO delivered stronger 1-year returns. VTWO offers more diversification with 1943 holdings.
Side-by-Side Comparison
| Metric | VOO | VTWO | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.06% | |
| AUM | $979.0B | $17.9B | |
| Dividend Yield | 1.09% | 1.39% | |
| Holdings | 509 | 1,970 | |
| YTD Return | +13.80% | +21.83% | |
| 1Y Return | +23.71% | +38.81% | |
| 3Y Return (annualized) | +21.50% | +17.59% | |
| 5Y Return (annualized) | +13.44% | +7.82% | |
| Volatility (annualized) | 14.1% | 19.1% | |
| Max Drawdown | -34.3% | -42.4% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Sep 7, 2010 | Sep 20, 2010 |
VOO vs VTWO Performance
Vanguard S&P 500 ETF (VOO) is a ETF from Vanguard (US) and Vanguard Russell 2000 ETF (VTWO) is a ETF from Vanguard (US). Over the past year VOO returned +23.71% while VTWO returned +38.81%. Year to date, VOO is up 13.80% versus a gain of 21.83% for VTWO.
Over three years, VOO compounded at +21.50% per year against +17.59% for VTWO; over five years the annualized figures are +13.44% and +7.82% respectively. Across the full 16-year window we track, VOO has the edge at +13.58% annualized vs +10.77%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VTWO has been the more volatile fund, with annualized monthly volatility of 19.1% compared with 14.1% for VOO. 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 -34.3% for VOO 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 0.87. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VOO charges 0.03% per year while VTWO charges 0.06%. On a $10,000 position that is $3 vs $6 annually, a gap of $3 per year that compounds over a long holding period. On income, VOO currently yields 1.09% against 1.39% for VTWO.
Holdings Overlap
VOO and VTWO share 3 holdings out of 2445 unique holdings combined, representing a 0.1% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VOO or VTWO?
VOO has an expense ratio of 0.03% while VTWO charges 0.06%. VOO is the cheaper option. On a $10,000 investment, that is $3 per year of difference.
Which performed better, VOO or VTWO?
Over the past year VOO returned +23.71% vs +38.81% for VTWO, so VTWO leads on 1-year performance. Over the longest common window we track (16 years), VOO annualized +13.58% vs +10.77% for VTWO. Past performance does not guarantee future results.
Which is riskier, VOO or VTWO?
VTWO has been the more volatile fund at 19.1% annualized versus 14.1% for VOO. Worst drawdown: VOO -34.3% vs VTWO -42.4%.
Should I hold both VOO and VTWO?
VOO and VTWO have a monthly-return correlation of 0.87, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VOO and VTWO?
VOO and VTWO share 3 common holdings with a 0.1% weight overlap. Combined, they hold 2445 unique securities.
Which pays a higher dividend, VOO or VTWO?
VOO yields 1.09% while VTWO yields 1.39%, so VTWO currently pays the higher dividend yield.
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