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Should Vanguard Mid-Cap ETF (VO) Be on Your Investing Radar?
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Looking for broad exposure to the Mid Cap Blend segment of the US equity market? You should consider the Vanguard Mid-Cap ETF (VO - Free Report) , a passively managed exchange traded fund launched on 01/26/2004.
The fund is sponsored by Vanguard. It has amassed assets over $58.83 billion, making it one of the largest ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 0.04%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.53%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 17.10% of the portfolio. Information Technology and Financials round out the top three.
Looking at individual holdings, Amphenol Corp (APH - Free Report) accounts for about 0.85% of total assets, followed by Arthur J Gallagher & Co (AJG - Free Report) and Motorola Solutions Inc (MSI - Free Report) .
The top 10 holdings account for about 5.62% of total assets under management.
Performance and Risk
VO seeks to match the performance of the CRSP US Mid Cap Index before fees and expenses. The CRSP US Mid Cap Index targets inclusion of the U.S. companies that fall between the top 70%-85% of investable market capitalization.
The ETF has lost about -0.95% so far this year and it's up approximately 8.35% in the last one year (as of 01/24/2024). In the past 52-week period, it has traded between $195.66 and $233.95.
The ETF has a beta of 1.09 and standard deviation of 19.16% for the trailing three-year period, making it a medium risk choice in the space. With about 338 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mid-Cap 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, VO is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell Mid-Cap ETF (IWR - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) track a similar index. While iShares Russell Mid-Cap ETF has $30.47 billion in assets, iShares Core S&P Mid-Cap ETF has $76.18 billion. IWR has an expense ratio of 0.19% and IJH charges 0.05%.
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 Mid-Cap ETF (VO) Be on Your Investing Radar?
Looking for broad exposure to the Mid Cap Blend segment of the US equity market? You should consider the Vanguard Mid-Cap ETF (VO - Free Report) , a passively managed exchange traded fund launched on 01/26/2004.
The fund is sponsored by Vanguard. It has amassed assets over $58.83 billion, making it one of the largest ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 0.04%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.53%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 17.10% of the portfolio. Information Technology and Financials round out the top three.
Looking at individual holdings, Amphenol Corp (APH - Free Report) accounts for about 0.85% of total assets, followed by Arthur J Gallagher & Co (AJG - Free Report) and Motorola Solutions Inc (MSI - Free Report) .
The top 10 holdings account for about 5.62% of total assets under management.
Performance and Risk
VO seeks to match the performance of the CRSP US Mid Cap Index before fees and expenses. The CRSP US Mid Cap Index targets inclusion of the U.S. companies that fall between the top 70%-85% of investable market capitalization.
The ETF has lost about -0.95% so far this year and it's up approximately 8.35% in the last one year (as of 01/24/2024). In the past 52-week period, it has traded between $195.66 and $233.95.
The ETF has a beta of 1.09 and standard deviation of 19.16% for the trailing three-year period, making it a medium risk choice in the space. With about 338 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mid-Cap 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, VO is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell Mid-Cap ETF (IWR - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) track a similar index. While iShares Russell Mid-Cap ETF has $30.47 billion in assets, iShares Core S&P Mid-Cap ETF has $76.18 billion. IWR has an expense ratio of 0.19% and IJH charges 0.05%.
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.