Vanguard Small-Cap ETFs Present Strategic Alternative to S&P 500 Index Funds
Investors seeking broad market exposure often default to the Vanguard S&P 500 ETF (VOO), but current conditions warrant consideration of small-cap alternatives. The Vanguard S&P Small-Cap 600 ETF (VIOO) and Vanguard Russell 2000 ETF (VTWO) offer exposure to companies with market capitalizations between $300 million and $2 billion—a stark contrast to the S&P 500's average $370 billion constituents.
Historical performance patterns suggest small caps may offer differentiated returns. These funds track carefully curated indices by Standard & Poor's, providing diversified exposure to this market segment. The median mid-cap's $10 billion valuation further highlights the potential growth runway for smaller companies.