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Should Vanguard MidCap Growth ETF (VOT) Be on Your Investing Radar?
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Looking for broad exposure to the Mid Cap Growth segment of the US equity market? You should consider the Vanguard MidCap Growth ETF (VOT - Free Report) , a passively managed exchange traded fund launched on 08/17/2006.
The fund is sponsored by Vanguard. It has amassed assets over $12.59 billion, making it one of the largest ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. Thus they have a nice balance of growth potential and stability.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Additionally, growth stocks have a greater level of risk associated with them. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.34%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 34.70% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Dexcom Inc. (DXCM - Free Report) accounts for about 1.46% of total assets, followed by Marvell Technology Inc. (MRVL - Free Report) and Msci Inc. (MSCI - Free Report) .
The top 10 holdings account for about 10.28% of total assets under management.
Performance and Risk
VOT seeks to match the performance of the CRSP U.S. Mid Cap Growth Index before fees and expenses. The CRSP U.S. Mid Cap Growth Index measures the investment return of mid-capitalization growth stocks.
The ETF has added about 0% so far this year and was up about 20.47% in the last one year (as of 01/03/2022). In the past 52-week period, it has traded between $204.75 and $265.79.
The ETF has a beta of 1.06 and standard deviation of 24.27% for the trailing three-year period, making it a medium risk choice in the space. With about 187 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard MidCap Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOT is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares S&P MidCap 400 Growth ETF (IJK - Free Report) and the iShares Russell MidCap Growth ETF (IWP - Free Report) track a similar index. While iShares S&P MidCap 400 Growth ETF has $8.60 billion in assets, iShares Russell MidCap Growth ETF has $16.21 billion. IJK has an expense ratio of 0.17% and IWP charges 0.23%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should Vanguard MidCap Growth ETF (VOT) Be on Your Investing Radar?
Looking for broad exposure to the Mid Cap Growth segment of the US equity market? You should consider the Vanguard MidCap Growth ETF (VOT - Free Report) , a passively managed exchange traded fund launched on 08/17/2006.
The fund is sponsored by Vanguard. It has amassed assets over $12.59 billion, making it one of the largest ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. Thus they have a nice balance of growth potential and stability.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Additionally, growth stocks have a greater level of risk associated with them. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.34%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 34.70% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Dexcom Inc. (DXCM - Free Report) accounts for about 1.46% of total assets, followed by Marvell Technology Inc. (MRVL - Free Report) and Msci Inc. (MSCI - Free Report) .
The top 10 holdings account for about 10.28% of total assets under management.
Performance and Risk
VOT seeks to match the performance of the CRSP U.S. Mid Cap Growth Index before fees and expenses. The CRSP U.S. Mid Cap Growth Index measures the investment return of mid-capitalization growth stocks.
The ETF has added about 0% so far this year and was up about 20.47% in the last one year (as of 01/03/2022). In the past 52-week period, it has traded between $204.75 and $265.79.
The ETF has a beta of 1.06 and standard deviation of 24.27% for the trailing three-year period, making it a medium risk choice in the space. With about 187 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard MidCap Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOT is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares S&P MidCap 400 Growth ETF (IJK - Free Report) and the iShares Russell MidCap Growth ETF (IWP - Free Report) track a similar index. While iShares S&P MidCap 400 Growth ETF has $8.60 billion in assets, iShares Russell MidCap Growth ETF has $16.21 billion. IJK has an expense ratio of 0.17% and IWP charges 0.23%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.