VTWO — Vanguard Russell 2000 ETF
Vanguard · Expense Ratio: 0.1% · US Small/Mid Cap · roughly average for its US Small/Mid Cap category
Key Facts
| Ticker | VTWO |
| Full Name | Vanguard Russell 2000 ETF |
| Provider | Vanguard |
| Expense Ratio | 0.1% |
| Category | US Small/Mid Cap |
| Assets Under Management | $10B |
| Inception Year | 2010 (16 years ago) |
| Number of Holdings | 1,900 |
| Dividend Yield | ~1.2% (low) |
| Top Holdings | SMCI, FTAI, INSM |
What Is VTWO?
VTWO, managed by Vanguard, launched in 2010, is a well-established ETF with adequate liquidity for most investors in the US Small/Mid Cap category. US small-cap and mid-cap stock ETF covering smaller US companies with higher growth potential. With $10B in assets under management, it has adequate trading volume for most individual investors.
VTWO in a FIRE Portfolio
This fund serves as a satellite position — adding targeted exposure to us small/mid cap within a FIRE portfolio built around a broad-market core.
Satellite holdings typically make up 5-20% of your portfolio. Small-cap stocks have historically outperformed large-caps over long periods — a 10-20% tilt can boost long-term returns for FIRE investors with 30+ year horizons.
Cost Analysis: How VTWO's 0.1% Fee Affects Your FIRE Timeline
At 0.1%, VTWO is moderately priced. Annual fees on a $100K investment: $100. Over 30 years, the fee drag shaves approximately 0.6% off your total returns. For a $1M FIRE portfolio, that's about $10,000 in cumulative fees — noticeable but reasonable for most investors.
Dividend Income Potential
With a low dividend yield of approximately 1.2%, here's what VTWO could generate in annual income at different portfolio sizes:
| Portfolio Value | Annual Dividend Income | Monthly Income |
|---|---|---|
| $100,000 | $1,200/year | $100/month |
| $250,000 | $3,000/year | $250/month |
| $500,000 | $6,000/year | $500/month |
| $1,000,000 | $12,000/year | $1,000/month |
Frequently Asked Questions About VTWO
What is the expense ratio for VTWO?
VTWO has an expense ratio of 0.1%. This is moderately priced — on a $100K portfolio, annual fees are $100. Roughly average for its us small/mid cap category.
Is VTWO good for a FIRE portfolio?
This fund serves as a satellite position — adding targeted exposure to us small/mid cap within a FIRE portfolio built around a broad-market core. Its 0.1% expense ratio is moderately priced for the US Small/Mid Cap category.
How does the 0.1% fee affect long-term returns?
At 0.1%, you'll pay $100/year per $100K invested. Over 30 years, fees reduce total returns by approximately 0.6%. Use the embedded calculator below to model the exact impact on your specific portfolio.
Is VTWO liquid enough for my portfolio?
VTWO manages $10B in assets — a well-established ETF with adequate liquidity for most investors. For most individual FIRE investors making regular contributions, liquidity is sufficient. If you're investing large lump sums ($100K+), use limit orders to control your execution price.
Similar ETFs in US Small/Mid Cap
- VB — Vanguard Small-Cap ETF (0.05% · Satellite Position)
- IJR — iShares Core S&P Small-Cap ETF (0.06% · Satellite Position)
- IWM — iShares Russell 2000 ETF (0.19% · Satellite Position)
- AVUV — Avantis US Small Cap Value ETF (0.25% · Satellite Position)
- VIOV — Vanguard S&P Small-Cap 600 Value ETF (0.15% · Satellite Position)
- SLYV — SPDR S&P 600 Small Cap Value ETF (0.15% · Satellite Position)
- SCHA — Schwab US Small-Cap ETF (0.04% · Satellite Position)
- SPSM — SPDR Portfolio S&P 600 Small Cap ETF (0.05% · Satellite Position)
- IWO — iShares Russell 2000 Growth ETF (0.24% · Satellite Position)