VTWO vs. IWO

Last updated Jun 5, 2026

VTWO (Vanguard Russell 2000 ETF) and IWO (iShares Russell 2000 Growth ETF) are both exchange-traded funds - VTWO is a Small Cap Blend Equities fund tracking the Russell 2000 Index, while IWO is a Small Cap Growth Equities fund tracking the Russell 2000 Growth Index. Both are passively managed. Over the past 10 years, VTWO returned 11.12%/yr vs 11.28%/yr for IWO. With a 0.97 correlation, they move nearly in lockstep. VTWO charges 0.06%/yr vs 0.24%/yr for IWO.

Performance

VTWO vs. IWO - Performance Comparison

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

Returns By Period

The year-to-date returns for both stocks are quite close, with VTWO having a 18.87% return and IWO slightly lower at 18.58%. Both investments have delivered pretty close results over the past 10 years, with VTWO having a 11.12% annualized return and IWO not far ahead at 11.28%.

VTWO

• 1D: 1.53%
• 1M: 3.33%
• YTD: 18.87%
• 6M: 16.64%
• 1Y: 41.90%
• 3Y*: 19.24%
• 5Y*: 6.60%
• 10Y*: 11.12%

IWO

• 1D: 1.57%
• 1M: 3.99%
• YTD: 18.58%
• 6M: 15.22%
• 1Y: 39.51%
• 3Y*: 19.07%
• 5Y*: 5.89%
• 10Y*: 11.28%

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

VTWO vs. IWO - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VTWO Vanguard Russell 2000 ETF	18.87%	12.90%	11.55%	17.08%	-20.49%	14.79%	20.22%	25.81%	-11.15%	14.69%
IWO iShares Russell 2000 Growth ETF	18.58%	12.90%	15.04%	18.51%	-26.27%	2.54%	34.68%	28.48%	-9.43%	22.25%

Correlation

The correlation between VTWO and IWO is 0.97 - 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	0.97
Correlation (3Y) Calculated over the trailing 3-year period	0.98
Correlation (5Y) Calculated over the trailing 5-year period	0.98
Correlation (10Y) Calculated over the trailing 10-year period	0.97
Correlation (All Time) Calculated using the full available price history since Sep 23, 2010	0.97

The correlation between VTWO and IWO has been stable across timeframes, ranging from 0.97 to 0.98 - a consistent structural relationship.

VTWO vs. IWO - Sectors Allocation Comparison

Sectors	VTWO	IWO
Industrials	17.7%	23.1%
Technology	17.0%	23.6%
Healthcare	16.5%	22.4%
Financial Services	15.7%	8.2%
Consumer Cyclical	8.4%	7.7%
Real Estate	6.1%	2.1%
Energy	6.1%	3.5%
Basic Materials	4.8%	4.2%
Utilities	2.9%	0.7%
Communication Services	2.4%	2.2%
Consumer Defensive	2.4%	2.6%

Return for Risk

VTWO vs. IWO — Risk / Return Rank

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

VTWO

VTWO Risk / Return Rank: 69
VTWO Sharpe Ratio Rank: 68
VTWO Sortino Ratio Rank: 67
VTWO Omega Ratio Rank: 60
VTWO Calmar Ratio Rank: 77
VTWO Martin Ratio Rank: 74

IWO

IWO Risk / Return Rank: 54
IWO Sharpe Ratio Rank: 56
IWO Sortino Ratio Rank: 54
IWO Omega Ratio Rank: 50
IWO Calmar Ratio Rank: 55
IWO Martin Ratio Rank: 56

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. IWO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Russell 2000 ETF (VTWO) and iShares Russell 2000 Growth ETF (IWO). 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	IWO	Difference
Sharpe ratio: Return per unit of total volatility	2.20	1.86	+0.34
Sortino ratio: Return per unit of downside risk	3.03	2.55	+0.48
Omega ratio: Gain probability vs. loss probability	1.36	1.30	+0.05
Calmar ratio: Return relative to maximum drawdown	3.83	2.67	+1.16
Martin ratio: Return relative to average drawdown	13.62	9.58	+4.04
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. IWO - Sharpe Ratio Comparison

The current VTWO Sharpe Ratio is 2.20, which is comparable to the IWO Sharpe Ratio of 1.86. The chart below compares the historical Sharpe Ratios of VTWO and IWO, 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	IWO	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.20	1.86	+0.34
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.29	0.24	+0.05
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.48	0.47	+0.01
Sharpe Ratio (All Time) Calculated using the full available price history	0.53	0.29	+0.24

Drawdowns

VTWO vs. IWO - Drawdown Comparison

The maximum VTWO drawdown since its inception was -41.19%, smaller than the maximum IWO drawdown of -60.11%. Use the drawdown chart below to compare losses from any high point for VTWO and IWO.

Drawdown Indicators

	VTWO	IWO	Difference
Max Drawdown Largest peak-to-trough decline	-41.19%	-60.11%	+18.92%
Max Drawdown (1Y) Largest decline over 1 year	-10.99%	-14.87%	+3.88%
Max Drawdown (3Y) Largest decline over 3 years	-27.57%	-28.57%	+1.00%
Max Drawdown (5Y) Largest decline over 5 years	-31.88%	-40.51%	+8.63%
Max Drawdown (10Y) Largest decline over 10 years	-41.19%	-42.02%	+0.83%
Current Drawdown Current decline from peak	0.00%	0.00%	0.00%
Average Drawdown Average peak-to-trough decline	-8.39%	-16.70%	+8.31%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.08%	4.14%	-1.06%

Volatility

VTWO vs. IWO - Volatility Comparison

The current volatility for Vanguard Russell 2000 ETF (VTWO) is 5.69%, while iShares Russell 2000 Growth ETF (IWO) has a volatility of 6.54%. This indicates that VTWO experiences smaller price fluctuations and is considered to be less risky than IWO based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VTWO	IWO	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.69%	6.54%	-0.85%
Volatility (6M) Calculated over the trailing 6-month period	13.57%	15.72%	-2.15%
Volatility (1Y) Calculated over the trailing 1-year period	19.12%	21.33%	-2.21%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	22.49%	24.49%	-2.00%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	23.08%	24.13%	-1.05%

VTWO vs. IWO - Expense Ratio Comparison

VTWO has a 0.06% expense ratio, which is lower than IWO's 0.24% 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

VTWO vs. IWO - Dividend Comparison

VTWO's dividend yield for the trailing twelve months is around 1.07%, more than IWO's 0.39% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
IWO iShares Russell 2000 Growth ETF	0.39%	0.56%	0.80%	0.73%	0.73%	0.32%	0.44%	0.71%	0.76%	0.73%	0.97%	0.89%
VTWO Vanguard Russell 2000 ETF	1.07%	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 IWO in my portfolio?

With a correlation of 0.97, VTWO and IWO 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, VTWO or IWO?

IWO has higher volatility (6.54%) compared to VTWO (5.69%). In terms of maximum drawdown, VTWO dropped -41.19% vs IWO's -60.11%.

Which ETF is better, VTWO or IWO?

On 10-year performance, IWO leads with 11.28% vs 11.12% for VTWO. On fees, VTWO is cheaper at 0.06% per year. On volatility, VTWO has been the lower-risk option at 5.69%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VTWO or IWO?

Over the 10-year period, IWO has performed better with a 11.28% return vs 11.12%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VTWO or IWO?

VTWO is cheaper with a 0.06% expense ratio, compared with 0.24% for IWO.

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

VTWO has the higher dividend yield at 1.07%, compared with 0.39% for IWO.

What is the main difference between VTWO and IWO?

VTWO is categorized as Small Cap Blend Equities, while IWO is Small Cap Growth Equities. VTWO tracks Russell 2000 Index, while IWO tracks Russell 2000 Growth Index. They also come from different issuers: Vanguard and iShares. Their fees differ too: 0.06% for VTWO and 0.24% for IWO.

Which has better risk-adjusted returns?

VTWO currently has the higher Sharpe Ratio (2.20 vs 1.86), 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.