Looking for broad exposure to the Small Cap Growth segment of the US equity market? You should consider the Vanguard S&P SmallCap 600 Growth ETF (
VIOG Quick Quote VIOG - Free Report) , a passively managed exchange traded fund launched on 09/09/2010.
The fund is sponsored by Vanguard. It has amassed assets over $554.05 million, making it one of the average sized 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.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility associated with them. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
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 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.54%.
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 Information Technology sector--about 18.10% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Gamestop Corp. (
GME Quick Quote GME - Free Report) accounts for about 1.78% of total assets, followed by Slcmt1142 and Cleveland-Cliffs Inc. ( CLF Quick Quote CLF - Free Report) .
The top 10 holdings account for about 10.12% of total assets under management.
Performance and Risk
VIOG seeks to match the performance of the S&P Small-Cap 600 Growth Index before fees and expenses. The S&P SmallCap 600 Growth Index represents the growth companies of the S&P SmallCap 600 Index.
The ETF has added roughly 15.02% so far this year and is up about 59.46% in the last one year (as of 05/27/2021). In the past 52-week period, it has traded between $138.27 and $231.85.
The ETF has a beta of 1.19 and standard deviation of 28.86% 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.
Vanguard S&P SmallCap 600 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, VIOG is a great option for investors seeking exposure to the Style Box - Small Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Growth ETF (
IWO Quick Quote IWO - Free Report) and the Vanguard SmallCap Growth ETF ( VBK Quick Quote VBK - Free Report) track a similar index. While iShares Russell 2000 Growth ETF has $11.67 billion in assets, Vanguard SmallCap Growth ETF has $15.25 billion. IWO has an expense ratio of 0.24% and VBK charges 0.07%. Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.