We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should Vanguard SmallCap ETF (VB) Be on Your Investing Radar?
Read MoreHide Full Article
The Vanguard SmallCap ETF (VB - Free Report) was launched on 01/26/2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $43.05 billion, making it one of the largest ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
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 0.05%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.50%.
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 Industrials sector--about 19.20% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, Idex Corp. (IEX - Free Report) accounts for about 0.39% of total assets, followed by Steel Dynamics Inc. (STLD - Free Report) and Targa Resources Corp. (TRGP - Free Report) .
Performance and Risk
VB seeks to match the performance of the CRSP US Small Cap Index before fees and expenses. The CRSP US Small Cap Index includes U.S. companies that fall between the bottom 2%-15% of the investable market capitalization. There is no lower limit in market capitalization. The index includes securities traded on NYSE, NYSE Market, NASDAQ or ARCA.
The ETF return is roughly 6.09% so far this year and is down about -4.95% in the last one year (as of 01/23/2023). In the past 52-week period, it has traded between $170.45 and $219.03.
The ETF has a beta of 1.12 and standard deviation of 29.53% for the trailing three-year period, making it a medium risk choice in the space. With about 1495 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard SmallCap 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, VB is an excellent option for investors seeking exposure to the Style Box - Small Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P SmallCap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $54.47 billion in assets, iShares Core S&P SmallCap ETF has $68.80 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should Vanguard SmallCap ETF (VB) Be on Your Investing Radar?
The Vanguard SmallCap ETF (VB - Free Report) was launched on 01/26/2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $43.05 billion, making it one of the largest ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
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 0.05%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.50%.
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 Industrials sector--about 19.20% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, Idex Corp. (IEX - Free Report) accounts for about 0.39% of total assets, followed by Steel Dynamics Inc. (STLD - Free Report) and Targa Resources Corp. (TRGP - Free Report) .
Performance and Risk
VB seeks to match the performance of the CRSP US Small Cap Index before fees and expenses. The CRSP US Small Cap Index includes U.S. companies that fall between the bottom 2%-15% of the investable market capitalization. There is no lower limit in market capitalization. The index includes securities traded on NYSE, NYSE Market, NASDAQ or ARCA.
The ETF return is roughly 6.09% so far this year and is down about -4.95% in the last one year (as of 01/23/2023). In the past 52-week period, it has traded between $170.45 and $219.03.
The ETF has a beta of 1.12 and standard deviation of 29.53% for the trailing three-year period, making it a medium risk choice in the space. With about 1495 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard SmallCap 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, VB is an excellent option for investors seeking exposure to the Style Box - Small Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P SmallCap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $54.47 billion in assets, iShares Core S&P SmallCap ETF has $68.80 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
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.