Meet the Unstoppable Vanguard ETF Obliterating the S&P 500 in 2026

Yahoo Finance ·

The U.S. and Iran have been engaged in a geopolitical conflict since the end of February, which has roiled global oil markets and set the stock market on edge. The two countries signed a ceasefire agreement last month, an important first step toward long-term peace, but tensions continue to flare, and the ceasefire unofficially ended this week. The stock market is still delivering positive returns this year despite periods of volatility, but investors are making a very clear choice about where they park their money. While the benchmark S&P 500 ( ^GSPC +0.42% ) has climbed by 9% so far, the Russell 2000 is sitting on a much bigger gain of 19%. The S&P has exposure to hundreds of multinational companies that draw significant revenue from overseas, whereas the Russell tracks the performance of 2,000 of America's smallest listed companies, which conduct the majority of their business inside America. This insulates them from some of the geopolitical risks cropping up around the world. The Vanguard Russell 2000 ETF ( VTWO 0.47% ) is an exchange-traded fund (ETF) that tracks the Russell 2000 by holding the same stocks. Here's why its run of outperformance versus the S&P 500 could continue.

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