VB vs. VTWO

Last updated Jun 23, 2026

VB (Vanguard Small-Cap ETF) and VTWO (Vanguard Russell 2000 ETF) are both Small Cap Blend Equities funds from Vanguard - VB tracks the CRSP US Small Cap Index while VTWO tracks the Russell 2000 Index. Both are passively managed. Over the past 10 years, VB returned 11.79%/yr vs 11.83%/yr for VTWO. With a 0.98 correlation, they move nearly in lockstep. VB charges 0.05%/yr vs 0.06%/yr for VTWO.

Performance

VB vs. VTWO - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Small-Cap ETF (VB) and Vanguard Russell 2000 ETF (VTWO). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VB achieves a 15.68% return, which is significantly lower than VTWO's 21.67% return. Both investments have delivered pretty close results over the past 10 years, with VB having a 11.79% annualized return and VTWO not far ahead at 11.83%.

VB

• 1D: 0.26%
• 1M: 2.83%
• YTD: 15.68%
• 6M: 13.00%
• 1Y: 30.17%
• 3Y*: 17.54%
• 5Y*: 7.39%
• 10Y*: 11.79%

VTWO

• 1D: 0.92%
• 1M: 4.84%
• YTD: 21.67%
• 6M: 18.16%
• 1Y: 44.30%
• 3Y*: 19.86%
• 5Y*: 6.94%
• 10Y*: 11.83%

*Multi-year figures are annualized to reflect compound growth (CAGR)

VB vs. VTWO - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VB Vanguard Small-Cap ETF	15.68%	8.87%	14.17%	18.22%	-17.51%	17.57%	19.19%	27.34%	-9.34%	16.26%
VTWO Vanguard Russell 2000 ETF	21.67%	12.90%	11.55%	17.08%	-20.49%	14.79%	20.22%	25.81%	-11.15%	14.69%

Correlation

The correlation between VB and VTWO is 0.96 - 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	0.96
Correlation (3Y) Calculated over the trailing 3-year period	0.97
Correlation (5Y) Calculated over the trailing 5-year period	0.98
Correlation (10Y) Calculated over the trailing 10-year period	0.98
Correlation (All Time) Calculated using the full available price history since Sep 22, 2010	0.98

The correlation between VB and VTWO has been stable across timeframes, ranging from 0.96 to 0.98 - a consistent structural relationship.

VB vs. VTWO - Sectors Allocation Comparison

Sectors	VB	VTWO
Industrials	20.6%	17.9%
Technology	19.4%	19.1%
Financial Services	12.3%	15.5%
Healthcare	11.3%	16.3%
Consumer Cyclical	10.9%	7.9%
Real Estate	7.5%	5.9%
Basic Materials	4.7%	4.7%
Energy	4.2%	5.3%
Consumer Defensive	3.1%	2.2%
Utilities	3.1%	2.8%
Communication Services	3.0%	2.5%

Return for Risk

VB vs. VTWO — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

VB

VB Risk / Return Rank: 60
VB Sharpe Ratio Rank: 56
VB Sortino Ratio Rank: 56
VB Omega Ratio Rank: 52
VB Calmar Ratio Rank: 69
VB Martin Ratio Rank: 69

VTWO

VTWO Risk / Return Rank: 73
VTWO Sharpe Ratio Rank: 73
VTWO Sortino Ratio Rank: 71
VTWO Omega Ratio Rank: 63
VTWO Calmar Ratio Rank: 80
VTWO Martin Ratio Rank: 77

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

VB vs. VTWO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Small-Cap ETF (VB) 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.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	VB	VTWO	Difference
Sharpe ratio: Return per unit of total volatility	1.82	2.27	-0.44
Sortino ratio: Return per unit of downside risk	2.59	3.07	-0.48
Omega ratio: Gain probability vs. loss probability	1.31	1.37	-0.05
Calmar ratio: Return relative to maximum drawdown	3.38	4.05	-0.68
Martin ratio: Return relative to average drawdown	12.38	14.36	-1.97

VB vs. VTWO - Sharpe Ratio Comparison

The current VB Sharpe Ratio is 1.82, which is comparable to the VTWO Sharpe Ratio of 2.27. The chart below compares the historical Sharpe Ratios of VB and VTWO, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

VB vs. VTWO - Drawdown Comparison

The maximum VB drawdown since its inception was -59.56%, which is greater than VTWO's maximum drawdown of -41.19%. Use the drawdown chart below to compare losses from any high point for VB and VTWO.

Drawdown Indicators

	VB	VTWO	Difference
Max Drawdown Largest peak-to-trough decline	-59.56%	-41.19%	-18.37%
Max Drawdown (1Y) Largest decline over 1 year	-8.98%	-10.99%	+2.01%
Max Drawdown (3Y) Largest decline over 3 years	-25.36%	-27.57%	+2.21%
Max Drawdown (5Y) Largest decline over 5 years	-28.15%	-31.88%	+3.73%
Max Drawdown (10Y) Largest decline over 10 years	-42.05%	-41.19%	-0.86%
Current Drawdown Current decline from peak	-0.39%	0.00%	-0.39%
Average Drawdown Average peak-to-trough decline	-8.42%	-8.37%	-0.05%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.44%	3.09%	-0.65%

Volatility

VB vs. VTWO - Volatility Comparison

The current volatility for Vanguard Small-Cap ETF (VB) is 4.92%, while Vanguard Russell 2000 ETF (VTWO) has a volatility of 6.49%. This indicates that VB 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.

Volatility by Period

	VB	VTWO	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.92%	6.49%	-1.57%
Volatility (6M) Calculated over the trailing 6-month period	12.21%	14.25%	-2.04%
Volatility (1Y) Calculated over the trailing 1-year period	16.66%	19.69%	-3.03%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	20.78%	22.56%	-1.78%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	21.45%	23.14%	-1.69%

VB vs. VTWO - Expense Ratio Comparison

VB has a 0.05% expense ratio, which is lower than VTWO's 0.06% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

VB vs. VTWO - Dividend Comparison

VB's dividend yield for the trailing twelve months is around 1.18%, more than VTWO's 1.09% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VB Vanguard Small-Cap ETF	1.18%	1.33%	1.30%	1.55%	1.59%	1.24%	1.14%	1.39%	1.67%	1.35%	1.50%	1.48%
VTWO Vanguard Russell 2000 ETF	1.09%	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

Can I hold both VB and VTWO in my portfolio?

With a correlation of 0.96, VB 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.

Which is riskier, VB or VTWO?

VTWO has higher volatility (6.49%) compared to VB (4.92%). In terms of maximum drawdown, VB dropped -59.56% vs VTWO's -41.19%.

Which ETF is better, VB or VTWO?

On 10-year performance, VTWO leads with 11.83% vs 11.79% for VB. On fees, VB is cheaper at 0.05% per year. On volatility, VB has been the lower-risk option at 4.92%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VB or VTWO?

Over the 10-year period, VTWO has performed better with a 11.83% return vs 11.79%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VB or VTWO?

VB is cheaper with a 0.05% expense ratio, compared with 0.06% for VTWO.

Which ETF pays a higher dividend yield, VB or VTWO?

VB has the higher dividend yield at 1.18%, compared with 1.09% for VTWO.

What is the main difference between VB and VTWO?

VB tracks CRSP US Small Cap Index, while VTWO tracks Russell 2000 Index. Their fees differ too: 0.05% for VB and 0.06% for VTWO.

Which has better risk-adjusted returns?

VTWO currently has the higher Sharpe Ratio (2.27 vs 1.82), 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.