VTWO vs. HSMV

Last updated Jun 4, 2026

VTWO (Vanguard Russell 2000 ETF) and HSMV (First Trust Horizon Managed Volatility Small/Mid ETF) are both Small Cap Blend Equities funds. VTWO is passively managed, while HSMV is actively managed. Over the past 5 years, VTWO returned 6.28%/yr vs 3.69%/yr for HSMV. Their correlation of 0.84 suggests significant overlap in exposure. VTWO charges 0.10%/yr vs 0.80%/yr for HSMV.

Performance

VTWO vs. HSMV - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Russell 2000 ETF (VTWO) and First Trust Horizon Managed Volatility Small/Mid ETF (HSMV). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VTWO achieves a 17.08% return, which is significantly higher than HSMV's 3.11% return.

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%

HSMV

• 1D: -0.50%
• 1M: -2.09%
• YTD: 3.11%
• 6M: 3.06%
• 1Y: 4.19%
• 3Y*: 8.36%
• 5Y*: 3.69%
• 10Y*: —

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

VTWO vs. HSMV - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020
VTWO Vanguard Russell 2000 ETF	17.08%	12.90%	11.55%	17.08%	-20.49%	14.79%	75.43%
HSMV First Trust Horizon Managed Volatility Small/Mid ETF	3.11%	1.57%	13.17%	5.01%	-9.44%	23.72%	34.70%

Correlation

The correlation between VTWO and HSMV is 0.60, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.60
Correlation (3Y) Calculated over the trailing 3-year period	0.78
Correlation (5Y) Calculated over the trailing 5-year period	0.83
Correlation (All Time) Calculated using the full available price history since Apr 8, 2020	0.84

Over the past year, the correlation between VTWO and HSMV has dropped to 0.60 - well below their long-term average of 0.84, suggesting their price drivers have been diverging.

VTWO vs. HSMV - Sectors Allocation Comparison

Sectors	VTWO	HSMV
Industrials	17.7%	15.0%
Technology	17.0%	1.7%
Healthcare	16.5%	4.9%
Financial Services	15.7%	16.6%
Consumer Cyclical	8.4%	7.8%
Real Estate	6.1%	23.8%
Energy	6.1%	2.8%
Basic Materials	4.8%	5.4%
Utilities	2.9%	11.9%
Communication Services	2.4%	2.3%
Consumer Defensive	2.4%	7.9%

Return for Risk

VTWO vs. HSMV — Risk / Return Rank

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

VTWO

VTWO Risk / Return Rank: 62
VTWO Sharpe Ratio Rank: 60
VTWO Sortino Ratio Rank: 60
VTWO Omega Ratio Rank: 54
VTWO Calmar Ratio Rank: 71
VTWO Martin Ratio Rank: 68

HSMV

HSMV Risk / Return Rank: 15
HSMV Sharpe Ratio Rank: 15
HSMV Sortino Ratio Rank: 15
HSMV Omega Ratio Rank: 14
HSMV Calmar Ratio Rank: 16
HSMV Martin Ratio Rank: 17

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.

VTWO vs. HSMV - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Russell 2000 ETF (VTWO) and First Trust Horizon Managed Volatility Small/Mid ETF (HSMV). 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.

	VTWO	HSMV	Difference
Sharpe ratio Return per unit of total volatility	2.07	0.41	+1.67
Sortino ratio Return per unit of downside risk	2.88	0.68	+2.20
Omega ratio Gain probability vs. loss probability	1.34	1.07	+0.27
Calmar ratio Return relative to maximum drawdown	3.60	0.54	+3.06
Martin ratio Return relative to average drawdown	12.79	1.62	+11.16
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VTWO vs. HSMV - Sharpe Ratio Comparison

The current VTWO Sharpe Ratio is 2.07, which is higher than the HSMV Sharpe Ratio of 0.41. The chart below compares the historical Sharpe Ratios of VTWO and HSMV, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	VTWO	HSMV	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.07	0.41	+1.67
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.28	0.25	+0.03
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.48	—	—
Sharpe Ratio (All Time) Calculated using the full available price history	0.52	0.67	-0.15

Drawdowns

VTWO vs. HSMV - Drawdown Comparison

The maximum VTWO drawdown since its inception was -41.19%, which is greater than HSMV's maximum drawdown of -19.16%. Use the drawdown chart below to compare losses from any high point for VTWO and HSMV.

Drawdown Indicators

	VTWO	HSMV	Difference
Max Drawdown Largest peak-to-trough decline	-41.19%	-19.16%	-22.03%
Max Drawdown (1Y) Largest decline over 1 year	-10.99%	-7.83%	-3.16%
Max Drawdown (3Y) Largest decline over 3 years	-27.57%	-15.45%	-12.12%
Max Drawdown (5Y) Largest decline over 5 years	-31.88%	-19.16%	-12.72%
Max Drawdown (10Y) Largest decline over 10 years	-41.19%	—	—
Current Drawdown Current decline from peak	-1.50%	-4.36%	+2.86%
Average Drawdown Average peak-to-trough decline	-8.39%	-5.62%	-2.77%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.08%	2.59%	+0.49%

Volatility

VTWO vs. HSMV - Volatility Comparison

Vanguard Russell 2000 ETF (VTWO) has a higher volatility of 5.73% compared to First Trust Horizon Managed Volatility Small/Mid ETF (HSMV) at 2.85%. This indicates that VTWO's price experiences larger fluctuations and is considered to be riskier than HSMV based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VTWO	HSMV	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.73%	2.85%	+2.88%
Volatility (6M) Calculated over the trailing 6-month period	13.50%	7.28%	+6.22%
Volatility (1Y) Calculated over the trailing 1-year period	19.12%	10.37%	+8.75%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	22.48%	15.00%	+7.48%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	23.08%	16.06%	+7.02%

VTWO vs. HSMV - Expense Ratio Comparison

VTWO has a 0.10% expense ratio, which is lower than HSMV's 0.80% expense ratio.

Dividends

VTWO vs. HSMV - Dividend Comparison

VTWO's dividend yield for the trailing twelve months is around 1.08%, less than HSMV's 2.00% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
HSMV First Trust Horizon Managed Volatility Small/Mid ETF	2.00%	2.01%	1.43%	1.43%	1.26%	0.76%	0.80%	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

Can I hold both VTWO and HSMV in my portfolio?

VTWO and HSMV have a correlation of 0.60, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VTWO or HSMV?

VTWO has higher volatility (5.73%) compared to HSMV (2.85%). In terms of maximum drawdown, VTWO dropped -41.19% vs HSMV's -19.16%.

Which ETF is better, VTWO or HSMV?

On 5-year performance, VTWO leads with 6.28% vs 3.69% for HSMV. On fees, VTWO is cheaper at 0.10% per year. On volatility, HSMV has been the lower-risk option at 2.85%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VTWO or HSMV?

Over the 5-year period, VTWO has performed better with a 6.28% return vs 3.69%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VTWO or HSMV?

VTWO is cheaper with a 0.10% expense ratio, compared with 0.80% for HSMV.

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

HSMV has the higher dividend yield at 2.00%, compared with 1.08% for VTWO.

What is the main difference between VTWO and HSMV?

They also come from different issuers: Vanguard and First Trust. Their fees differ too: 0.10% for VTWO and 0.80% for HSMV.

Which has better risk-adjusted returns?

VTWO currently has the higher Sharpe Ratio (2.07 vs 0.41), 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.