MSSM vs. VTWO
MSSM (Morgan Stanley Pathway Small-Mid Cap Equity ETF) and VTWO (Vanguard Russell 2000 ETF) are both Small Cap Blend Equities funds. MSSM is actively managed, while VTWO is passively managed. Over the past year, MSSM returned 35.45% vs 39.34% for VTWO. With a 0.98 correlation, they move nearly in lockstep. MSSM charges 0.62%/yr vs 0.10%/yr for VTWO.
Performance
MSSM vs. VTWO - Performance Comparison
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Returns By Period
The year-to-date returns for both stocks are quite close, with MSSM having a 17.34% return and VTWO slightly lower at 17.08%.
MSSM
- 1D
- -0.79%
- 1M
- 3.77%
- YTD
- 17.34%
- 6M
- 17.18%
- 1Y
- 35.45%
- 3Y*
- —
- 5Y*
- —
- 10Y*
- —
VTWO
- 1D
- -1.38%
- 1M
- 3.51%
- YTD
- 17.08%
- 6M
- 15.89%
- 1Y
- 39.34%
- 3Y*
- 18.11%
- 5Y*
- 6.28%
- 10Y*
- 11.07%
MSSM vs. VTWO - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | |
|---|---|---|---|
MSSM Morgan Stanley Pathway Small-Mid Cap Equity ETF | 17.34% | 11.33% | -5.83% |
VTWO Vanguard Russell 2000 ETF | 17.08% | 12.90% | -6.80% |
Correlation
The correlation between MSSM and VTWO is 0.98 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | 0.98 |
Correlation (All Time) Calculated using the full available price history since Dec 10, 2024 | 0.98 |
The correlation between MSSM and VTWO has been stable across timeframes, ranging from 0.98 to 0.98 - a consistent structural relationship.
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Return for Risk
MSSM vs. VTWO — Risk / Return Rank
MSSM
VTWO
MSSM vs. VTWO - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Morgan Stanley Pathway Small-Mid Cap Equity ETF (MSSM) and Vanguard Russell 2000 ETF (VTWO). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.
| MSSM | VTWO | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | 0.00 | ||
| Sortino ratioReturn per unit of downside risk | +0.03 | ||
| Omega ratioGain probability vs. loss probability | 1.35 | 1.34 | +0.01 |
| Calmar ratioReturn relative to maximum drawdown | 3.75 | 3.60 | +0.15 |
| Martin ratioReturn relative to average drawdown | 14.47 | 12.79 | +1.68 |
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month. | |||
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Sharpe Ratios by Period
| MSSM | VTWO | Difference | |
|---|---|---|---|
Sharpe Ratio (1Y)Calculated over the trailing 1-year period | 2.07 | 2.07 | 0.00 |
Sharpe Ratio (5Y)Calculated over the trailing 5-year period | — | 0.28 | — |
Sharpe Ratio (10Y)Calculated over the trailing 10-year period | — | 0.48 | — |
Sharpe Ratio (All Time)Calculated using the full available price history | 0.73 | 0.52 | +0.20 |
Drawdowns
MSSM vs. VTWO - Drawdown Comparison
The maximum MSSM drawdown since its inception was -24.18%, smaller than the maximum VTWO drawdown of -41.19%. Use the drawdown chart below to compare losses from any high point for MSSM and VTWO.
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Drawdown Indicators
| MSSM | VTWO | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -24.18% | -41.19% | +17.01% |
Max Drawdown (1Y)Largest decline over 1 year | -9.50% | -10.99% | +1.49% |
Max Drawdown (3Y)Largest decline over 3 years | — | -27.57% | — |
Max Drawdown (5Y)Largest decline over 5 years | — | -31.88% | — |
Max Drawdown (10Y)Largest decline over 10 years | — | -41.19% | — |
Current DrawdownCurrent decline from peak | -0.79% | -1.50% | +0.71% |
Average DrawdownAverage peak-to-trough decline | -4.67% | -8.39% | +3.72% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 2.46% | 3.08% | -0.62% |
Volatility
MSSM vs. VTWO - Volatility Comparison
The current volatility for Morgan Stanley Pathway Small-Mid Cap Equity ETF (MSSM) is 5.05%, while Vanguard Russell 2000 ETF (VTWO) has a volatility of 5.73%. This indicates that MSSM experiences smaller price fluctuations and is considered to be less risky than VTWO based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| MSSM | VTWO | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 5.05% | 5.73% | -0.68% |
Volatility (6M)Calculated over the trailing 6-month period | 12.76% | 13.50% | -0.74% |
Volatility (1Y)Calculated over the trailing 1-year period | 17.27% | 19.12% | -1.85% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 20.91% | 22.48% | -1.57% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 20.91% | 23.08% | -2.17% |
MSSM vs. VTWO - Expense Ratio Comparison
MSSM has a 0.62% expense ratio, which is higher than VTWO's 0.10% expense ratio.
Dividends
MSSM vs. VTWO - Dividend Comparison
MSSM's dividend yield for the trailing twelve months is around 2.69%, more than VTWO's 1.08% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
MSSM Morgan Stanley Pathway Small-Mid Cap Equity ETF | 2.69% | 3.15% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
VTWO Vanguard Russell 2000 ETF | 1.08% | 1.25% | 1.21% | 1.45% | 1.48% | 1.13% | 0.92% | 1.36% | 1.41% | 1.18% | 1.27% | 1.23% |
Frequently Asked Questions
With a correlation of 0.98, MSSM and VTWO move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.
VTWO has higher volatility (5.73%) compared to MSSM (5.05%). In terms of maximum drawdown, MSSM dropped -24.18% vs VTWO's -41.19%.
On 1-year performance, VTWO leads with 39.34% vs 35.45% for MSSM. On fees, VTWO is cheaper at 0.10% per year. On volatility, MSSM has been the lower-risk option at 5.05%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 1-year period, VTWO has performed better with a 39.34% return vs 35.45%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
VTWO is cheaper with a 0.10% expense ratio, compared with 0.62% for MSSM.
MSSM has the higher dividend yield at 2.69%, compared with 1.08% for VTWO.
They also come from different issuers: Morgan Stanley and Vanguard. Their fees differ too: 0.62% for MSSM and 0.10% for VTWO.
VTWO currently has the higher Sharpe Ratio (2.07 vs 2.07), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.
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