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 Mega Cap Value ETF (MGV) Be on Your Investing Radar?
Read MoreHide Full Article
The Vanguard Mega Cap Value ETF (MGV - Free Report) was launched on 12/17/2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $5.82 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
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 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.56%.
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 Healthcare sector--about 23.70% of the portfolio. Financials and Industrials round out the top three.
Looking at individual holdings, Exxon Mobil Corp. (XOM - Free Report) accounts for about 3.29% of total assets, followed by Unitedhealth Group Inc. (UNH - Free Report) and Berkshire Hathaway Inc. (BRK.B - Free Report) .
The top 10 holdings account for about 25.79% of total assets under management.
Performance and Risk
MGV seeks to match the performance of the CRSP U.S. Mega Cap Value Index before fees and expenses. The CRSP U.S. Mega Cap Value Index is a float-adjusted, market-capitalization-weighted index designed to measure equity market performance of mega-capitalization value stocks in the United States.
The ETF has lost about -2.01% so far this year and was up about 2.33% in the last one year (as of 05/15/2023). In the past 52-week period, it has traded between $89.91 and $106.81.
The ETF has a beta of 0.86 and standard deviation of 16.39% for the trailing three-year period, making it a medium risk choice in the space. With about 145 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mega Cap 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, MGV is an outstanding option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $48.98 billion in assets, Vanguard Value ETF has $99.65 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.
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 Mega Cap Value ETF (MGV) Be on Your Investing Radar?
The Vanguard Mega Cap Value ETF (MGV - Free Report) was launched on 12/17/2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $5.82 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
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 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.56%.
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 Healthcare sector--about 23.70% of the portfolio. Financials and Industrials round out the top three.
Looking at individual holdings, Exxon Mobil Corp. (XOM - Free Report) accounts for about 3.29% of total assets, followed by Unitedhealth Group Inc. (UNH - Free Report) and Berkshire Hathaway Inc. (BRK.B - Free Report) .
The top 10 holdings account for about 25.79% of total assets under management.
Performance and Risk
MGV seeks to match the performance of the CRSP U.S. Mega Cap Value Index before fees and expenses. The CRSP U.S. Mega Cap Value Index is a float-adjusted, market-capitalization-weighted index designed to measure equity market performance of mega-capitalization value stocks in the United States.
The ETF has lost about -2.01% so far this year and was up about 2.33% in the last one year (as of 05/15/2023). In the past 52-week period, it has traded between $89.91 and $106.81.
The ETF has a beta of 0.86 and standard deviation of 16.39% for the trailing three-year period, making it a medium risk choice in the space. With about 145 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mega Cap 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, MGV is an outstanding option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $48.98 billion in assets, Vanguard Value ETF has $99.65 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.
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.