When it comes to the major U.S. stock market indexes, the benchmark S&P 500 (^GSPC -0.43%) tends to get most of the attention. It's highly diversified, but its top eight holdings are the trillion-dollar giants that operate at the forefront of technological innovations such as artificial intelligence (AI), and they tend to generate the strongest revenue and earnings growth.
The stock market declined a bit after the recent Federal Reserve interest rate decision, but the reality is that the main benchmark indices, including the S&P 500 and Nasdaq, are still within a couple of percentage points of their all-time highs. However, the recent market turbulence has disproportionately affected small-cap stocks, and as a result, you might be surprised to learn that the Russell 2000 small-cap index is down by nearly 9% from its recent high, very close to the 10% threshold that is generally considered to be a correction.
Jefferies analysts have set the S&P 500 (^GSPC 0.38%) with a 2025 target of 6,000. That forecast implies about 1% downside from its current level of 6,050, which ranks among the most bearish outlooks on Wall Street.
The Vanguard Russell 2000 Index Fund ETF tracks small capitalization U.S. stocks primarily in the Industrial, Financial, and Health Care sectors. The ETF offers low expenses and broad diversification, with a limited top-ten components concentration. I estimate VTWO holdings trade at a current earnings yield of about 5.40%.
The Vanguard Russell 2000 ETF (VTWO) was launched on 09/22/2010, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.
Stocks are capping off a banner year led by AI names like Nvidia and Palantir, but as investors get ready for 2025, the market seems to be shifting.
1 Vanguard Index Fund May Beat the S&P 500 by 100% in the Next Few Years, According to a Wall Street Analyst
This ambitious prediction just received a boost from President-Elect Trump's election win.
Exchange-traded funds are a great way for investors to diversify.
The Federal Reserve is slashing interest rates, which is great news for small-cap stocks.
After its huge rally, the S&P 500 is the most expensive it's been since the pandemic's height. Small-caps are now trading at a discount, but they historically trade at a premium to the S&P 500.
If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the Vanguard Russell 2000 ETF (VTWO), a passively managed exchange traded fund launched on 09/22/2010.