IWM vs VOO: Which ETF Is Better in 2026?
Short answer
IWM (iShares Russell 2000 ETF) tracks Russell 2000 at 0.19%; VOO (Vanguard S&P 500 ETF) tracks S&P 500 at 0.03%. They give you different exposure, so pick by what you want to own: IWM for Russell 2000, VOO for S&P 500. Neither is universally better.
IWM vs VOO at a glance
| IWM | VOO | |
|---|---|---|
| Fund | iShares Russell 2000 ETF | Vanguard S&P 500 ETF |
| Tracks | Russell 2000 | S&P 500 |
| Expense ratio | 0.19% | 0.03% |
| Dividend yield | ~1.2% | ~1.3% |
| AUM | ~$70 billion | ~$1.2 trillion |
| Top holding | IWM | MSFT |
| Issuer | iShares (BlackRock) | Vanguard |
Approximate as of early 2026; verify with each issuer.
What is IWM?
Tracks the Russell 2000 Index, the standard benchmark for US small-cap equity, holding roughly 2,000 smaller companies. More domestically focused and historically more volatile than large-cap funds, with no single name dominating. Used as a small-cap sleeve alongside a large-cap core. Verify current figures on the issuer's site.
What is VOO?
Tracks the S&P 500 Index, the standard measure of US large-cap equity. Effectively identical exposure to SPY and IVV at a 0.03% expense ratio. Used as a core building block in most diversified portfolios.
IWM or VOO: which should you pick?
- Pick IWM if you want Russell 2000 exposure at 0.19%.
- Pick VOO if you want S&P 500 exposure at 0.03%.
- Overlap: their top holdings differ, so they can be complementary.
- Cost: 0.19% vs 0.03%, a small but compounding difference.
The bottom line: IWM vs VOO
IWM (Russell 2000) and VOO (S&P 500) give you different exposure, so pick by what you want to own, not by which is "better". They are different enough to hold together if you want both. Walnut can show the overlap against your real portfolio before you decide.
Build a portfolio around IWM with Walnut
Walnut connects your real brokerage so you can see how IWM and VOO overlap with what you already own, analyze either by chatting through Claude or ChatGPT, and place any trade yourself.
FAQ
What is the difference between IWM and VOO?
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IWM tracks Russell 2000 (0.19% expense ratio); VOO tracks S&P 500 (0.03%). They track different indexes, so they give you different exposure.
Is IWM or VOO cheaper?
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IWM charges 0.19% and VOO charges 0.03% as of early 2026. Over decades the cheaper fund keeps more of your return, but verify current figures with each issuer.
Do IWM and VOO hold the same stocks?
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Their top holdings differ, so they are more complementary than redundant. Check the full holdings before assuming they are interchangeable.
Which has a higher dividend yield, IWM or VOO?
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IWM yields about ~1.2% and VOO about ~1.3% (early 2026, approximate). If income matters, that gap is one input, but total return and cost matter more for most long-term investors.
Should you own both IWM and VOO?
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It can make sense if they give you genuinely different exposure, but check the overlap first so you are not paying two fees for one bet. Walnut can show the overlap against your real portfolio.
Walnut is informational, not investment advice. ETF figures are approximations stamped to early 2026; verify current data with each issuer before deciding. Nothing here is a recommendation.