The Vanguard Consumer Discretionary ETF (
VCR Quick Quote VCR - Free Report) was launched on 01/26/2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Consumer Discretionary - Broad segment of the equity market.
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.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 13, placing it in bottom 19%.
The fund is sponsored by Vanguard. It has amassed assets over $4.23 billion, making it one of the largest ETFs attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. VCR seeks to match the performance of the MSCI US Investable Market Consumer Discretionary 25/50 Index before fees and expenses.
The MSCI US Investable Market Consumer Discretionary 25/50 Index is designed to transition in and out of securities affected by pending updates to the consumer discretionary sector.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.89%.
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 in the Consumer Discretionary sector--about 100% of the portfolio.
Looking at individual holdings, Amazon.com Inc. (
AMZN Quick Quote AMZN - Free Report) accounts for about 24.89% of total assets, followed by Tesla Inc. ( TSLA Quick Quote TSLA - Free Report) and Home Depot Inc. ( HD Quick Quote HD - Free Report) .
The top 10 holdings account for about 63.65% of total assets under management.
Performance and Risk
So far this year, VCR has lost about -30.39%, and is down about -30.94% in the last one year (as of 11/25/2022). During this past 52-week period, the fund has traded between $222.06 and $348.23.
The ETF has a beta of 1.25 and standard deviation of 29.99% for the trailing three-year period, making it a medium risk choice in the space. With about 314 holdings, it effectively diversifies company-specific risk.
Vanguard Consumer Discretionary 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, VCR is an outstanding option for investors seeking exposure to the Consumer Discretionary ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Fidelity MSCI Consumer Discretionary Index ETF (
FDIS Quick Quote FDIS - Free Report) tracks MSCI USA IMI Consumer Discretionary Index and the Consumer Discretionary Select Sector SPDR ETF ( XLY Quick Quote XLY - Free Report) tracks Consumer Discretionary Select Sector Index. Fidelity MSCI Consumer Discretionary Index ETF has $1.03 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $14.17 billion. FDIS has an expense ratio of 0.08% and XLY charges 0.10%. Bottom Line
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