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ETF Comparison

IWM vs VTWO: Which Is the Better Pick in 2026?

A head-to-head comparison of iShares Russell 2000 ETF and Vanguard Russell 2000 Index Fund ETF Shares covering yield, cost, risk, and income potential.

Updated October 16, 2026

How these figures are calculated: methodology.

Best for

  • IWMInvestors who want broad equity exposure.
  • VTWOInvestors who want simple, diversified core exposure in one low-cost fund.

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Visual comparison

Key metrics

Projected income on $10K

Projections assume the current yield and share price remain constant. Actual results will vary.

Total returns

100% reinvested · ex-date convention. Period returns use this fixed assumption, independent of chart settings. YTD and 1Y are cumulative period returns; 3Y, 5Y, and 10Y are annualized. The shared Since-start window is annualized only when it covers at least one year.

IWM has lagged VTWO over the trailing twelve months, posting a 11.48% total return against 11.64%. The lead holds up over 10 years too: VTWO has compounded at 9.94% a year, against 9.79% for IWM. Figures are total returns: price change plus every distribution reinvested.

Total return and risk statistics by fund. Each row is one fund; each column is one period or statistic.
SymbolYTD cumulative1Y cumulative3Y annualized5Y annualized10Y annualizedSince Sep 2010Volatility Sharpe Sortino Max drawdown
IWM10.61%11.48%17.34%5.02%9.79%10.56%21.0%0.560.83-27.5%
VTWO10.72%11.64%17.55%5.20%9.94%10.64%21.1%0.570.84-27.6%

Total return with all distributions reinvested on the ex-dividend date (a modeling convention, not the cash-settlement date), split-adjusted, as of October 16, 2026. YTD and 1Y are cumulative period returns; 3Y, 5Y, and 10Y are annualized. The shared Since-start window is annualized only when it covers at least one year. “Since Sep 2010” measures every fund from September 24, 2010 — the start of shared available history — so all funds share one comparison window. Volatility is the annualized standard deviation of daily total returns over the trailing 3 years. Sharpe and Sortino divide the annualized return in excess of the risk-free rate by, respectively, that volatility and the downside deviation (both over the trailing 3 years) — higher is better. Max drawdown is the largest peak-to-trough total-return decline over the same window — shallower is better.

Side-by-side snapshot

Side-by-side snapshot. Each row is one metric; each column is one fund.
MetricIWMVTWO
Full nameiShares Russell 2000 ETFVanguard Russell 2000 Index Fund ETF Shares
IssueriSharesVanguard
Last Close$270.44 as of October 16, 2026$109.25 as of October 16, 2026
Distribution rate1.11%1.43%
Trailing 12-month yield1.01%1.24%
Distribution Safety Score™ 9291
Safety-Adjusted Yield 1.02%1.30%
Expense ratio0.19%0.06%
AUM$78.7B$16.6B
Distribution frequencyQuarterlyQuarterly
Underlying indexRussell 2000 IndexVanguard Russell 2000 Index
ObjectiveProvide exposure to the fund's underlying index or strategy per issuer materials.—
Asset classEquityEquity
Inception date05/22/200009/20/2010
Beta1.271.27
Last dividend$0.75$0.391
Ex-dividend date09/15/202609/23/2026

Bottom lineChoose IWM if you want broad equity exposure. Choose VTWO if you want simple, diversified core exposure in one low-cost fund.

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iShares
ETFs468
Total AUM$4.70T

ETFs and AUM reflect what Dividend Vision tracks — the issuer's full lineup may be larger.

iShares, operated by BlackRock, is one of the largest and most established ETF providers globally, known for offering broad, liquid index-tracking funds across nearly all asset classes and investment styles. The lineup encompasses a comprehensive range of strategies including core equity and bond exposure, dividend and income-focused funds, covered call strategies, ESG and thematic investments, factor-based approaches, alternatives, commodities, and municipal bonds, serving both individual and institutional investors. With numerous popular ticker symbols and extensive diversification across geographies, sectors, and investment objectives, iShares provides one of the market's widest selections of ETFs for building diversified portfolios.

See our curated list of related YouTube videos on IWM.

See all ETFs from iShares
Vanguard
ETFs116
Total AUM$4.71T

ETFs and AUM reflect what Dividend Vision tracks — the issuer's full lineup may be larger.

Vanguard is one of the largest and most established ETF issuers, known for low-cost, broadly diversified fund offerings built on passive indexing principles. Their lineup spans multiple asset classes and strategies, including core equity and bond index funds, dividend-focused portfolios, ESG-screened options, factor-based strategies, sector exposure, target-date retirement funds, and international investments across developed and emerging markets. The platform is characterized by its emphasis on accessibility and cost efficiency across a comprehensive range of fund families, serving both individual investors seeking broad market exposure and those pursuing specific income, sustainability, or thematic objectives.

See our curated list of related YouTube videos on VTWO.

See all ETFs from Vanguard

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Quick verdict

IWM (iShares Russell 2000 ETF) and VTWO (Vanguard Russell 2000 Index Fund ETF Shares) are both quarterly-pay dividend ETFs, but they take different approaches.

VTWO offers the higher yield at 1.43% vs 1.11% for IWM. A higher yield means more current income per dollar invested, though it may come with different risk characteristics.

VTWO is cheaper with an expense ratio of 0.06% compared to 0.19%.

They have different reference exposures: IWM is linked to Russell 2000 Index while VTWO is linked to Vanguard Russell 2000 Index, which means their performance drivers differ.

IWM is the larger fund by assets ($78.7B), but assets alone do not establish trading costs or liquidity.

Deep dive

Yield & income

On a $10,000 investment, IWM would generate roughly $27.75 cash per distribution, while VTWO would produce $35.75 cash per distribution, at current distribution rates. Both pay quarterly distributions.

IWM yield1.11%
VTWO yield1.43%
Cash diff on $10K$8.00

Cost & efficiency

Over 10 years on $10,000, IWM would cost approximately $190 in fees vs $60 for VTWO (simplified, not compounded). The $130.00 difference may be offset by yield or performance.

IWM ER0.19%
VTWO ER0.06%

Strategy & risk

Both IWM and VTWO wrap Russell 2000 Index with similar strategies (small caps and small caps). The practical differences are yield target, fee structure, and issuer track record — not the underlying mechanic.

IWM beta1.27
VTWO beta1.27

Fund details

IWM is managed by iShares (launched 05/22/2000) with $78.7B in assets. VTWO is managed by Vanguard (launched 09/20/2010) with $16.6B in assets.

IWM AUM$78.7B
VTWO AUM$16.6B
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Frequently asked questions

What is the current distribution rate for IWM and VTWO?

IWM currently distributes 1.11% and VTWO 1.43%, based on fund data updated October 2026. Distribution rate moves with both the payout and the share price, so check the as-of date before relying on either figure.

Is IWM or VTWO better for dividend income?

It depends on your goals. VTWO currently offers the higher distribution yield, which means more income per dollar invested. However, a lower-yield fund may offer better total return or lower volatility. Consider your time horizon and risk tolerance.

What is the difference between IWM and VTWO?

Both IWM (iShares Russell 2000 ETF) and VTWO (Vanguard Russell 2000 Index Fund ETF Shares) track Russell 2000 Index with similar approaches — the labels "small caps" and "small caps" describe closely related mechanics. The real differences show up in yield target (1.11% vs 1.43%), expense ratio (0.19% vs 0.06%), and issuer (iShares vs Vanguard).

Can I hold both IWM and VTWO?

You can, but expect significant overlap. Both funds use similar strategies on Russell 2000 Index, so holding them together gives you two wrappers around effectively the same exposure — not true diversification. Weigh issuer, fee, and yield differences rather than treating them as complementary.

Is IWM or VTWO safer?

By Dividend Vision's Distribution Safety Score — a rules-based 0–100 estimate of how resilient a distribution looks, where higher is safer — they are effectively tied: IWM scores 92, VTWO scores 91. Neither has a clear safety edge on that measure. No score makes an investment risk-free — treat this as a screening signal, not a guarantee.

Which has lower fees, IWM or VTWO?

IWM has an expense ratio of 0.19% while VTWO charges 0.06%. Lower fees mean more of your investment returns stay in your pocket over time.

How much income does $10,000 in IWM vs VTWO generate?

At current rates, $10,000 in IWM would generate roughly $27.75 cash per distribution ($111.00 annually). The same in VTWO would produce about $35.75 cash per distribution ($143.00 annually).

Which has performed better historically, IWM or VTWO?

IWM has lagged VTWO over the trailing twelve months, posting a 11.48% total return against 11.64%. The lead holds up over 10 years too: VTWO has compounded at 9.94% a year, against 9.79% for IWM. Figures are total returns: price change plus every distribution reinvested. Past performance does not guarantee future results.

More comparisons to explore

IWM vs VTWO — at a glance

Generated October 17, 2026.

stocks. IWM is the larger fund by assets, while VTWO offers a cheaper entry point for the same equity exposure.

How they differ

The most striking difference is the expense ratio gap of 0.13%. Both funds track the Russell 2000, and both carry the same beta of 1.27, so the cost spread directly affects after-fee returns. VTWO's 0.06% allows it to pass through a distribution rate of 1.43%, compared to 1.11% for IWM—a 32-basis-point yield advantage on the same underlying index.

AUM tells a different story: IWM holds $78.7B in assets versus $16.6B for VTWO, giving IWM roughly five times the asset base. Both pay dividends quarterly. IWM has a longer track record, with an inception date of 05/22/2000, while VTWO launched 09/20/2010.

Who each is best for

IWM: Fits investors who prioritize maximum liquidity and the deepest trading volume in a Russell 2000 vehicle, or who already own IWM and see no reason to switch given the modest fee difference.

Key risks to know

  • Small-cap volatility. Both funds carry a beta of 1.27, meaning they amplify broad market moves. Small caps tend to underperform large caps in downturns and during rising-rate environments.
  • Earnings sensitivity. Russell 2000 companies are more vulnerable to economic slowdowns and credit tightening than large-cap peers, which can drive sharp drawdowns in recessionary periods. Over a 20-year period, the difference in cumulative cost can be material.
  • Index concentration. Both funds hold roughly 2,000 stocks, but Russell 2000 methodology can create pockets of concentration; verify actual top-10 holdings if sector tilts matter to your allocation.

Bottom line

If you're indifferent between the two, VTWO's cost advantage and higher yield make a straightforward case for lower total fees. Past performance doesn't predict future results; both funds will track the same underlying index and will rise or fall with small-cap equity risk.

AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.

Learn the method

The metrics behind this comparison, explained in the Academy.

How to read a fund's stats How expense ratios eat returns Correlation between two funds

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These comparisons follow the Dividend Vision methodology.