VTWO vs. VB

Last updated Jun 19, 2026

VTWO (Vanguard Russell 2000 ETF) and VB (Vanguard Small-Cap ETF) are both Small Cap Blend Equities funds from Vanguard - VTWO tracks the Russell 2000 Index while VB tracks the CRSP US Small Cap Index. Both are passively managed. Over the past 10 years, VTWO returned 11.45%/yr vs 11.47%/yr for VB. With a 0.98 correlation, they move nearly in lockstep. VTWO charges 0.06%/yr vs 0.05%/yr for VB.

Performance

VTWO vs. VB - Performance Comparison

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

Returns By Period

In the year-to-date period, VTWO achieves a 20.56% return, which is significantly higher than VB's 15.38% return. Both investments have delivered pretty close results over the past 10 years, with VTWO having a 11.45% annualized return and VB not far ahead at 11.47%.

VTWO

• 1D: 1.96%
• 1M: 8.47%
• YTD: 20.56%
• 6M: 19.38%
• 1Y: 42.75%
• 3Y*: 18.34%
• 5Y*: 7.39%
• 10Y*: 11.45%

VB

• 1D: 1.17%
• 1M: 6.28%
• YTD: 15.38%
• 6M: 15.00%
• 1Y: 29.96%
• 3Y*: 16.28%
• 5Y*: 7.90%
• 10Y*: 11.47%

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

VTWO vs. VB - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VTWO Vanguard Russell 2000 ETF	20.56%	12.90%	11.55%	17.08%	-20.49%	14.79%	20.22%	25.81%	-11.15%	14.69%
VB Vanguard Small-Cap ETF	15.38%	8.87%	14.17%	18.22%	-17.51%	17.57%	19.19%	27.34%	-9.34%	16.26%

Correlation

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

VTWO vs. VB - Sectors Allocation Comparison

Sectors	VTWO	VB
Industrials	17.7%	20.8%
Technology	17.0%	17.2%
Healthcare	16.5%	11.1%
Financial Services	15.7%	12.6%
Consumer Cyclical	8.4%	11.3%
Real Estate	6.1%	7.6%
Energy	6.1%	4.7%
Basic Materials	4.8%	4.8%
Utilities	2.9%	3.3%
Communication Services	2.4%	3.1%
Consumer Defensive	2.4%	3.4%

Return for Risk

VTWO vs. VB — Risk / Return Rank

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

VTWO

VTWO Risk / Return Rank: 73
VTWO Sharpe Ratio Rank: 74
VTWO Sortino Ratio Rank: 72
VTWO Omega Ratio Rank: 63
VTWO Calmar Ratio Rank: 81
VTWO Martin Ratio Rank: 78

VB

VB Risk / Return Rank: 62
VB Sharpe Ratio Rank: 57
VB Sortino Ratio Rank: 58
VB Omega Ratio Rank: 53
VB Calmar Ratio Rank: 71
VB Martin Ratio Rank: 71

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. VB - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Russell 2000 ETF (VTWO) and Vanguard Small-Cap ETF (VB). 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.

	VTWO	VB	Difference
Sharpe ratio: Return per unit of total volatility	2.19	1.81	+0.38
Sortino ratio: Return per unit of downside risk	2.98	2.58	+0.41
Omega ratio: Gain probability vs. loss probability	1.36	1.31	+0.04
Calmar ratio: Return relative to maximum drawdown	3.91	3.35	+0.56
Martin ratio: Return relative to average drawdown	13.85	12.30	+1.55

VTWO vs. VB - Sharpe Ratio Comparison

The current VTWO Sharpe Ratio is 2.19, which is comparable to the VB Sharpe Ratio of 1.81. The chart below compares the historical Sharpe Ratios of VTWO and VB, 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

VTWO vs. VB - Drawdown Comparison

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

Drawdown Indicators

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

Volatility

VTWO vs. VB - Volatility Comparison

Vanguard Russell 2000 ETF (VTWO) has a higher volatility of 6.82% compared to Vanguard Small-Cap ETF (VB) at 5.24%. This indicates that VTWO's price experiences larger fluctuations and is considered to be riskier than VB based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VTWO	VB	Difference
Volatility (1M) Calculated over the trailing 1-month period	6.82%	5.24%	+1.58%
Volatility (6M) Calculated over the trailing 6-month period	14.28%	12.23%	+2.05%
Volatility (1Y) Calculated over the trailing 1-year period	19.64%	16.63%	+3.01%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	22.57%	20.80%	+1.77%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	23.14%	21.45%	+1.69%

VTWO vs. VB - Expense Ratio Comparison

VTWO has a 0.06% expense ratio, which is higher than VB's 0.05% expense ratio. However, 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. VB - Dividend Comparison

VTWO's dividend yield for the trailing twelve months is around 1.31%, more than VB's 1.18% 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	1.31%	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 VB in my portfolio?

With a correlation of 0.96, VTWO and VB 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 VB?

VTWO has higher volatility (6.82%) compared to VB (5.24%). In terms of maximum drawdown, VTWO dropped -41.19% vs VB's -59.56%.

Which ETF is better, VTWO or VB?

On 10-year performance, VB leads with 11.47% vs 11.45% for VTWO. On fees, VB is cheaper at 0.05% per year. On volatility, VB has been the lower-risk option at 5.24%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VTWO or VB?

Over the 10-year period, VB has performed better with a 11.47% return vs 11.45%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VTWO or VB?

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

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

VTWO has the higher dividend yield at 1.31%, compared with 1.18% for VB.

What is the main difference between VTWO and VB?

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

Which has better risk-adjusted returns?

VTWO currently has the higher Sharpe Ratio (2.19 vs 1.81), 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.