We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should Vanguard SmallCap Growth ETF (VBK) Be on Your Investing Radar?
Read MoreHide Full Article
Designed to provide broad exposure to the Small Cap Growth segment of the US equity market, the Vanguard SmallCap Growth ETF (VBK - Free Report) is a passively managed exchange traded fund launched on 01/26/2004.
The fund is sponsored by Vanguard. It has amassed assets over $11.71 billion, making it the largest ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
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 0.50%.
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 23.10% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Slcmt1142 accounts for about 2.45% of total assets, followed by Entegris Inc. (ENTG - Free Report) and Bio-Techne Corp. (TECH - Free Report) .
Performance and Risk
VBK seeks to match the performance of the CRSP U.S. Small Cap Growth Index before fees and expenses. The CRSP U.S. Small Cap Growth Index measures the investment return of small-capitalization growth stocks.
The ETF has lost about -28.81% so far this year and is down about -33.54% in the last one year (as of 11/07/2022). In the past 52-week period, it has traded between $188.16 and $305.79.
The ETF has a beta of 1.13 and standard deviation of 30.16% for the trailing three-year period, making it a medium risk choice in the space. With about 712 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard SmallCap Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VBK is a sufficient option for those seeking exposure to the Style Box - Small Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The iShares S&P SmallCap 600 Growth ETF (IJT - Free Report) and the iShares Russell 2000 Growth ETF (IWO - Free Report) track a similar index. While iShares S&P SmallCap 600 Growth ETF has $5.04 billion in assets, iShares Russell 2000 Growth ETF has $9.35 billion. IJT has an expense ratio of 0.18% and IWO charges 0.23%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should Vanguard SmallCap Growth ETF (VBK) Be on Your Investing Radar?
Designed to provide broad exposure to the Small Cap Growth segment of the US equity market, the Vanguard SmallCap Growth ETF (VBK - Free Report) is a passively managed exchange traded fund launched on 01/26/2004.
The fund is sponsored by Vanguard. It has amassed assets over $11.71 billion, making it the largest ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
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 0.50%.
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 23.10% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Slcmt1142 accounts for about 2.45% of total assets, followed by Entegris Inc. (ENTG - Free Report) and Bio-Techne Corp. (TECH - Free Report) .
Performance and Risk
VBK seeks to match the performance of the CRSP U.S. Small Cap Growth Index before fees and expenses. The CRSP U.S. Small Cap Growth Index measures the investment return of small-capitalization growth stocks.
The ETF has lost about -28.81% so far this year and is down about -33.54% in the last one year (as of 11/07/2022). In the past 52-week period, it has traded between $188.16 and $305.79.
The ETF has a beta of 1.13 and standard deviation of 30.16% for the trailing three-year period, making it a medium risk choice in the space. With about 712 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard SmallCap Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VBK is a sufficient option for those seeking exposure to the Style Box - Small Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The iShares S&P SmallCap 600 Growth ETF (IJT - Free Report) and the iShares Russell 2000 Growth ETF (IWO - Free Report) track a similar index. While iShares S&P SmallCap 600 Growth ETF has $5.04 billion in assets, iShares Russell 2000 Growth ETF has $9.35 billion. IJT has an expense ratio of 0.18% and IWO charges 0.23%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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.