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Should Vanguard SmallCap Value ETF (VBR) Be on Your Investing Radar?
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If you're interested in broad exposure to the Small Cap Value segment of the US equity market, look no further than the Vanguard SmallCap Value ETF (VBR - Free Report) , a passively managed exchange traded fund launched on 01/26/2004.
The fund is sponsored by Vanguard. It has amassed assets over $27.38 billion, making it the largest ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
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 1.76%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 21.80% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Nuance Communications Inc. accounts for about 0.57% of total assets, followed by Vici Properties Inc. (VICI - Free Report) and Diamondback Energy Inc. (FANG - Free Report) .
Performance and Risk
VBR seeks to match the performance of the CRSP U.S. Small Cap Value Index before fees and expenses. The CRSP U.S. Small Cap Value Index measures the investment return of small-capitalization value stocks.
The ETF has lost about -1.47% so far this year and it's up approximately 8.33% in the last one year (as of 03/23/2022). In the past 52-week period, it has traded between $160 and $185.72.
The ETF has a beta of 1.18 and standard deviation of 29.12% for the trailing three-year period, making it a medium risk choice in the space. With about 997 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard SmallCap Value 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, VBR is an outstanding option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares S&P SmallCap 600 Value ETF (IJS - Free Report) and the iShares Russell 2000 Value ETF (IWN - Free Report) track a similar index. While iShares S&P SmallCap 600 Value ETF has $8.86 billion in assets, iShares Russell 2000 Value ETF has $15.05 billion. IJS has an expense ratio of 0.18% and IWN charges 0.24%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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 SmallCap Value ETF (VBR) Be on Your Investing Radar?
If you're interested in broad exposure to the Small Cap Value segment of the US equity market, look no further than the Vanguard SmallCap Value ETF (VBR - Free Report) , a passively managed exchange traded fund launched on 01/26/2004.
The fund is sponsored by Vanguard. It has amassed assets over $27.38 billion, making it the largest ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
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 1.76%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 21.80% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Nuance Communications Inc. accounts for about 0.57% of total assets, followed by Vici Properties Inc. (VICI - Free Report) and Diamondback Energy Inc. (FANG - Free Report) .
Performance and Risk
VBR seeks to match the performance of the CRSP U.S. Small Cap Value Index before fees and expenses. The CRSP U.S. Small Cap Value Index measures the investment return of small-capitalization value stocks.
The ETF has lost about -1.47% so far this year and it's up approximately 8.33% in the last one year (as of 03/23/2022). In the past 52-week period, it has traded between $160 and $185.72.
The ETF has a beta of 1.18 and standard deviation of 29.12% for the trailing three-year period, making it a medium risk choice in the space. With about 997 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard SmallCap Value 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, VBR is an outstanding option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares S&P SmallCap 600 Value ETF (IJS - Free Report) and the iShares Russell 2000 Value ETF (IWN - Free Report) track a similar index. While iShares S&P SmallCap 600 Value ETF has $8.86 billion in assets, iShares Russell 2000 Value ETF has $15.05 billion. IJS has an expense ratio of 0.18% and IWN charges 0.24%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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.