Meet the Unstoppable Vanguard ETF Beating the S&P 500, the Nasdaq-100, and the Dow Jones in 2026

The ongoing geopolitical tensions successful the Middle East person sparked chaotic swings successful lipid prices, with important consequences for the planetary economy. It's led to marketplace volatility implicit the past fewer months; however, the S&P 500 (SNPINDEX: ^GSPC), the Dow Jones Industrial Average (DJINDICES: ^DJI), and the Nasdaq-100 inactive managed year-to-date gains of betwixt 1.6% and 7.1%.

The Russell 2000, which tracks the show of astir 2,000 of the smallest companies listed connected U.S. banal exchanges, is doing adjacent amended successful 2026 with a instrumentality of 11.1% truthful far. Many of these companies behaviour the bulk of their concern wrong America, truthful they are much insulated from planetary geopolitical risks than the multinational giants that predominate different indexes similar the S&P 500.

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The Vanguard Russell 2000 ETF (NASDAQ: VTWO) is an exchange-traded money (ETF) that tracks the show of the Russell 2000 by holding the aforesaid stocks. Here's wherefore it tin proceed beating the large U.S. indexes during 2026.

Small caps are benefiting from a fig of tailwinds

Companies successful the Russell 2000 span each economical sector, truthful it's highly diversified. Plus, portion the exertion assemblage unsocial makes up much than one-third of the worth of the S&P 500 and astir 60% of the Nasdaq-100, the Russell is far much balanced.

Its largest assemblage is healthcare, with a portfolio weighting of 18.7%, followed by industrials astatine 18.1% and financials astatine 17.2%. Moreover, the apical 10 holdings successful the Russell correspond conscionable 5.5% of the worth of its portfolio, truthful its show isn't dictated by a specified fistful of stocks. Generally speaking, a much evenly distributed scale tin nutrient steadier returns with little volatility than 1 that is highly concentrated.

Data source: Vanguard. Portfolio weightings are close arsenic of March 31, 2026, and are taxable to change.

Most of these companies run exclusively successful the U.S., truthful not lone are they somewhat insulated from the progressively unstable geopolitical environment, but they besides payment from highly favorable authorities policies. The Trump medication continues to chopped regulations to trim the outgo of doing business, and it besides imposed a bid of tariffs connected imported goods to marque home companies much competitory with their planetary counterparts.