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Should Vanguard S&P SmallCap 600 Value ETF (VIOV) Be on Your Investing Radar?
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Launched on 09/09/2010, the Vanguard S&P SmallCap 600 Value ETF (VIOV - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $1.25 billion, making it one of the average sized ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
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 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.65%.
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 Financials sector--about 22% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Helmerich & Payne Inc. (HP - Free Report) accounts for about 0.98% of total assets, followed by South Jersey Industries Inc. and Patterson-Uti Energy Inc. (PTEN - Free Report) .
The top 10 holdings account for about 7.2% of total assets under management.
Performance and Risk
VIOV seeks to match the performance of the S&P SmallCap 600 Value Index before fees and expenses. The S&P SmallCap 600 Value Index represents the value companies of the S&P SmallCap 600 Index.
The ETF has lost about -8.24% so far this year and is down about -9.93% in the last one year (as of 11/21/2022). In the past 52-week period, it has traded between $142.77 and $187.75.
The ETF has a beta of 1.17 and standard deviation of 32.65% for the trailing three-year period, making it a medium risk choice in the space. With about 466 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard S&P SmallCap 600 Value ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VIOV is an excellent option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Value ETF (IWN - Free Report) and the Vanguard SmallCap Value ETF (VBR - Free Report) track a similar index. While iShares Russell 2000 Value ETF has $12.48 billion in assets, Vanguard SmallCap Value ETF has $24.32 billion. IWN has an expense ratio of 0.23% and VBR charges 0.07%.
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 S&P SmallCap 600 Value ETF (VIOV) Be on Your Investing Radar?
Launched on 09/09/2010, the Vanguard S&P SmallCap 600 Value ETF (VIOV - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $1.25 billion, making it one of the average sized ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
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 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.65%.
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 Financials sector--about 22% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Helmerich & Payne Inc. (HP - Free Report) accounts for about 0.98% of total assets, followed by South Jersey Industries Inc. and Patterson-Uti Energy Inc. (PTEN - Free Report) .
The top 10 holdings account for about 7.2% of total assets under management.
Performance and Risk
VIOV seeks to match the performance of the S&P SmallCap 600 Value Index before fees and expenses. The S&P SmallCap 600 Value Index represents the value companies of the S&P SmallCap 600 Index.
The ETF has lost about -8.24% so far this year and is down about -9.93% in the last one year (as of 11/21/2022). In the past 52-week period, it has traded between $142.77 and $187.75.
The ETF has a beta of 1.17 and standard deviation of 32.65% for the trailing three-year period, making it a medium risk choice in the space. With about 466 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard S&P SmallCap 600 Value ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VIOV is an excellent option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Value ETF (IWN - Free Report) and the Vanguard SmallCap Value ETF (VBR - Free Report) track a similar index. While iShares Russell 2000 Value ETF has $12.48 billion in assets, Vanguard SmallCap Value ETF has $24.32 billion. IWN has an expense ratio of 0.23% and VBR charges 0.07%.
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.