For investors seeking momentum, Vanguard Small-Cap Growth ETF (VBK - Free Report) is probably on radar now. The fund just hit a 52-week high and is up nearly 23% from its 52-week low price of $140.10/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
VBK in Focus
This fund seeks to provide exposure to the small-cap growth segment with key holdings in industrials, information technology, financials, and health care. It is highly diversified across components with none holding more than 0.70% share and charges 7 bps in fees per year (see: all the Small Cap ETFs here).
Why the Move?
The small-cap space of the broad U.S. stock market has been an area to watch lately given the surge in U.S. dollar. This is because small-cap stocks will benefit from a rising dollar as these are closely tied to the domestic economy and do not have much exposure to the international market. Additionally, growing geopolitical tensions in the Middle East especially after the re-initiation of sanctions on Iran has raised the appeal for the pint-sized stocks, which are considered safe and better plays if any political issue creeps into the picture.
More Gains Ahead?
Currently, VBK has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank. As a result, there is still some promise for investors who want to ride on this surging ETF.
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