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Should Vanguard MidCap Growth ETF (VOT) Be on Your Investing Radar?
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Launched on 08/17/2006, the Vanguard MidCap Growth ETF (VOT - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Growth segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $9.71 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
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. These types of companies, then, have a good balance of stability and growth potential.
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. Also, growth stocks are a type of equity that carries more risk compared to others. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 0.70%.
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 29.10% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Synopsys Inc. (SNPS - Free Report) accounts for about 1.86% of total assets, followed by Cadence Design Systems Inc. (CDNS - Free Report) and Amphenol Corp. (APH - Free Report) .
The top 10 holdings account for about 14.44% 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 lost about -24.84% so far this year and is down about -27.88% in the last one year (as of 11/15/2022). In the past 52-week period, it has traded between $165.84 and $265.79.
The ETF has a beta of 1.09 and standard deviation of 29.06% for the trailing three-year period, making it a medium risk choice in the space. With about 180 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 sufficient 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 $7.17 billion in assets, iShares Russell MidCap Growth ETF has $12.17 billion. IJK has an expense ratio of 0.17% and IWP 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.
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Should Vanguard MidCap Growth ETF (VOT) Be on Your Investing Radar?
Launched on 08/17/2006, the Vanguard MidCap Growth ETF (VOT - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Growth segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $9.71 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
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. These types of companies, then, have a good balance of stability and growth potential.
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. Also, growth stocks are a type of equity that carries more risk compared to others. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 0.70%.
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 29.10% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Synopsys Inc. (SNPS - Free Report) accounts for about 1.86% of total assets, followed by Cadence Design Systems Inc. (CDNS - Free Report) and Amphenol Corp. (APH - Free Report) .
The top 10 holdings account for about 14.44% 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 lost about -24.84% so far this year and is down about -27.88% in the last one year (as of 11/15/2022). In the past 52-week period, it has traded between $165.84 and $265.79.
The ETF has a beta of 1.09 and standard deviation of 29.06% for the trailing three-year period, making it a medium risk choice in the space. With about 180 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 sufficient 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 $7.17 billion in assets, iShares Russell MidCap Growth ETF has $12.17 billion. IJK has an expense ratio of 0.17% and IWP 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.