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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 $9.76 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
With market capitalization between $2 billion and $10 billion, mid cap companies usually contain higher growth prospects than large cap companies, and are considered less risky than their small cap counterparts. Thus, companies that fall under this category provide a stable and growth-heavy investment.
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. Further, growth stocks have a higher level of volatility associated with them. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
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 0.75%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 27.40% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Amphenol Corp. (APH - Free Report) accounts for about 1.65% of total assets, followed by Cadence Design Systems Inc. (CDNS - Free Report) and Dexcom Inc. (DXCM - Free Report) .
The top 10 holdings account for about 15.26% 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 roughly 4.39% so far this year and is down about -15.63% in the last one year (as of 01/19/2023). In the past 52-week period, it has traded between $165.84 and $230.05.
The ETF has a beta of 1.09 and standard deviation of 29.48% for the trailing three-year period, making it a medium risk choice in the space. With about 172 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard MidCap 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, VOT is a good option for those seeking exposure to the Style Box - Mid Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
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 $7.27 billion in assets, iShares Russell MidCap Growth ETF has $12.18 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 $9.76 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
With market capitalization between $2 billion and $10 billion, mid cap companies usually contain higher growth prospects than large cap companies, and are considered less risky than their small cap counterparts. Thus, companies that fall under this category provide a stable and growth-heavy investment.
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. Further, growth stocks have a higher level of volatility associated with them. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
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 0.75%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 27.40% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Amphenol Corp. (APH - Free Report) accounts for about 1.65% of total assets, followed by Cadence Design Systems Inc. (CDNS - Free Report) and Dexcom Inc. (DXCM - Free Report) .
The top 10 holdings account for about 15.26% 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 roughly 4.39% so far this year and is down about -15.63% in the last one year (as of 01/19/2023). In the past 52-week period, it has traded between $165.84 and $230.05.
The ETF has a beta of 1.09 and standard deviation of 29.48% for the trailing three-year period, making it a medium risk choice in the space. With about 172 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard MidCap 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, VOT is a good option for those seeking exposure to the Style Box - Mid Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
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 $7.27 billion in assets, iShares Russell MidCap Growth ETF has $12.18 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.