Small-cap growth ETFs and tactical investment strategies

Investors looking to target the small-cap growth segment have several options, including Vanguard’s Morningstar Small-Cap Growth ETF (VBK) and the iShares Russell 2000 Growth ETF (IWO). VBK offers a significantly lower expense ratio of 0.05% compared to IWO’s 0.24%, though IWO has provided slightly higher recent returns and a broader portfolio.

In addition to growth-focused funds, tactical strategies involving RVT and IWMI are being used to manage small-cap exposure in volatile markets. RVT provides active stock selection and potential upside through discounts to net asset value (NAV), while IWMI is used to monetize volatility within the Russell 2000 through options. Analysts suggest adjusting allocations between these assets based on RVT’s discount levels and implied volatility.