Wall Street doesn't always get things right, but Tom Lee from Fundstrat Global Advisors is one analyst with a hot hand right now. He predicted the S&P 500 index would close above 4,750 in 2023, and it ended the year at 4,769. He also entered 2024 with an S&P index target of 5,200, which was the highest on Wall Street at the time, and the index blew past that level within the first three months.
Lee also predicted the Russell 2000 could soar 50% in 2024. This index is home to approximately 2,000 of the smallest listed stocks in the U.S.
, with the largest company in the index worth just $53 billion. Lee cites valuations and the potential for lower interest rates as key reasons for his prediction. The Russell 2000 had a sluggish first half of 2024, so it will have to climb 41.
5% between now and the end of the year to meet Lee's forecast. The Vanguard Russell 2000 ETF ( VTWO 3.46% ) closely tracks the performance of the index, so it's a simple way for investors to capture that gain if he turns out to be right.
The Vanguard Russell 2000 ETF is a great way to invest in small caps Thanks to the meteoric rise of trillion-dollar giants like Nvidia , technology is the largest sector in the S&P 500, with a weighting of 30%. The Russell 2000 is a little more balanced -- the industrial sector has the largest weighting at 19%, followed by healthcare at 15.2% and financials at 14.
8%. The top-10 holdings in the Vanguard Russell 2000 ETF make up just 5.2% of its total value, so its performanc.