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 Mid-Cap Growth ETF (VOT) Be on Your Investing Radar?
Read MoreHide Full Article
Launched on 08/17/2006, the Vanguard Mid-Cap 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 $11.89 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
Mid cap companies have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. Thus, companies that fall under this category provide a stable and growth-heavy investment.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility associated with them. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
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 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.71%.
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 Information Technology sector--about 28.50% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Amphenol Corp (APH - Free Report) accounts for about 1.77% of total assets, followed by Motorola Solutions Inc (MSI - Free Report) and Arista Networks Inc (ANET - Free Report) .
The top 10 holdings account for about 15.7% 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 gained about 0.30% so far this year and is up about 15.41% in the last one year (as of 01/31/2024). In the past 52-week period, it has traded between $180.90 and $221.20.
The ETF has a beta of 1.13 and standard deviation of 23.21% for the trailing three-year period, making it a medium risk choice in the space. With about 157 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mid-Cap Growth 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, VOT is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares S&P Mid-Cap 400 Growth ETF (IJK - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While iShares S&P Mid-Cap 400 Growth ETF has $8.26 billion in assets, iShares Russell Mid-Cap Growth ETF has $14.38 billion. IJK has an expense ratio of 0.17% and IWP charges 0.23%.
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should Vanguard Mid-Cap Growth ETF (VOT) Be on Your Investing Radar?
Launched on 08/17/2006, the Vanguard Mid-Cap 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 $11.89 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
Mid cap companies have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. Thus, companies that fall under this category provide a stable and growth-heavy investment.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility associated with them. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
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 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.71%.
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 Information Technology sector--about 28.50% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Amphenol Corp (APH - Free Report) accounts for about 1.77% of total assets, followed by Motorola Solutions Inc (MSI - Free Report) and Arista Networks Inc (ANET - Free Report) .
The top 10 holdings account for about 15.7% 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 gained about 0.30% so far this year and is up about 15.41% in the last one year (as of 01/31/2024). In the past 52-week period, it has traded between $180.90 and $221.20.
The ETF has a beta of 1.13 and standard deviation of 23.21% for the trailing three-year period, making it a medium risk choice in the space. With about 157 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mid-Cap Growth 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, VOT is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares S&P Mid-Cap 400 Growth ETF (IJK - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While iShares S&P Mid-Cap 400 Growth ETF has $8.26 billion in assets, iShares Russell Mid-Cap Growth ETF has $14.38 billion. IJK has an expense ratio of 0.17% and IWP charges 0.23%.
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.