Looking for broad exposure to the Mid Cap Blend segment of the US equity market? You should consider the Vanguard MidCap ETF (
VO Quick Quote 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 $49.10 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.
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.04%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.39%.
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 Information Technology sector--about 17.20% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Occidental Petroleum Corp. (
OXY Quick Quote OXY - Free Report) accounts for about 0.96% of total assets, followed by Valero Energy Corp. ( VLO Quick Quote VLO - Free Report) and Devon Energy Corp. ( DVN Quick Quote DVN - Free Report) .
The top 10 holdings account for about 7.36% 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 -17.94% so far this year and is down about -16.02% in the last one year (as of 09/07/2022). In the past 52-week period, it has traded between $190.36 and $261.20.
The ETF has a beta of 1.07 and standard deviation of 25.93% for the trailing three-year period, making it a medium risk choice in the space. With about 376 holdings, it effectively diversifies company-specific risk.
Vanguard MidCap 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 MidCap ETF (
IWR Quick Quote IWR - Free Report) and the iShares Core S&P MidCap ETF ( IJH Quick Quote IJH - Free Report) track a similar index. While iShares Russell MidCap ETF has $26.98 billion in assets, iShares Core S&P MidCap ETF has $59.68 billion. IWR has an expense ratio of 0.18% and IJH charges 0.05%. 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.