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Should Vanguard Mid-Cap ETF (VO) Be on Your Investing Radar?
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Launched on 01/26/2004, the Vanguard Mid-Cap ETF (VO - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Blend segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $76.77 billion, making it one of the largest ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
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.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
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 0.04%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.43%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 18.80% of the portfolio. Information Technology and Financials round out the top three.
Looking at individual holdings, Constellation Energy Corp (CEG - Free Report) accounts for about 0.99% of total assets, followed by Amphenol Corp (APH - Free Report) and Welltower Inc (WELL - Free Report) .
The top 10 holdings account for about 1.94% of total assets under management.
Performance and Risk
VO seeks to match the performance of the CRSP US Mid Cap Index before fees and expenses. The CRSP US Mid Cap Index targets inclusion of the U.S. companies that fall between the top 70%-85% of investable market capitalization.
The ETF has gained about 22.86% so far this year and is up roughly 30.63% in the last one year (as of 12/06/2024). In the past 52-week period, it has traded between $220.39 and $284.63.
The ETF has a beta of 1.08 and standard deviation of 18.55% for the trailing three-year period, making it a medium risk choice in the space. With about 321 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mid-Cap 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, VO is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell Mid-Cap ETF (IWR - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) track a similar index. While iShares Russell Mid-Cap ETF has $41.41 billion in assets, iShares Core S&P Mid-Cap ETF has $100.46 billion. IWR has an expense ratio of 0.19% and IJH charges 0.05%.
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.
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Should Vanguard Mid-Cap ETF (VO) Be on Your Investing Radar?
Launched on 01/26/2004, the Vanguard Mid-Cap ETF (VO - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Blend segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $76.77 billion, making it one of the largest ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
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.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
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 0.04%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.43%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 18.80% of the portfolio. Information Technology and Financials round out the top three.
Looking at individual holdings, Constellation Energy Corp (CEG - Free Report) accounts for about 0.99% of total assets, followed by Amphenol Corp (APH - Free Report) and Welltower Inc (WELL - Free Report) .
The top 10 holdings account for about 1.94% of total assets under management.
Performance and Risk
VO seeks to match the performance of the CRSP US Mid Cap Index before fees and expenses. The CRSP US Mid Cap Index targets inclusion of the U.S. companies that fall between the top 70%-85% of investable market capitalization.
The ETF has gained about 22.86% so far this year and is up roughly 30.63% in the last one year (as of 12/06/2024). In the past 52-week period, it has traded between $220.39 and $284.63.
The ETF has a beta of 1.08 and standard deviation of 18.55% for the trailing three-year period, making it a medium risk choice in the space. With about 321 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mid-Cap 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, VO is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell Mid-Cap ETF (IWR - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) track a similar index. While iShares Russell Mid-Cap ETF has $41.41 billion in assets, iShares Core S&P Mid-Cap ETF has $100.46 billion. IWR has an expense ratio of 0.19% and IJH charges 0.05%.
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.