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Should Vanguard S&P Small-Cap 600 Growth ETF (VIOG) Be on Your Investing Radar?
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Looking for broad exposure to the Small Cap Growth segment of the US equity market? You should consider the Vanguard S&P Small-Cap 600 Growth ETF (VIOG - Free Report) , a passively managed exchange traded fund launched on 09/09/2010.
The fund is sponsored by Vanguard. It has amassed assets over $344.58 M, making it one of the average sized ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also 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 0.20%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.80%.
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 Healthcare sector--about 20.50% of the portfolio. Industrials and Information Technology round out the top three.
Looking at individual holdings, Chemed Corp. (CHE - Free Report) accounts for about 1.18% of total assets, followed by Five Below Inc. (FIVE - Free Report) and On Assignment Inc. (ASGN - Free Report) .
The top 10 holdings account for about 9.75% of total assets under management.
Performance and Risk
VIOG seeks to match the performance of the S&P Small-Cap 600 Growth Index before fees and expenses. The S&P SmallCap 600 Growth Index represents the growth companies of the S&P SmallCap 600 Index.
The ETF has gained about 9.93% so far this year and was up about 24.62% in the last one year (as of 05/22/2018). In the past 52-week period, it has traded between $128.65 and $160.27.
The ETF has a beta of 1.02 and standard deviation of 15.61% for the trailing three-year period, making it a medium risk choice in the space. With about 335 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard S&P Small-Cap 600 Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VIOG is a good option for those seeking exposure to the Small Cap ETFs area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Small-Cap Growth ETF (VBK - Free Report) and the iShares Russell 2000 Growth ETF (IWO - Free Report) track a similar index. While Vanguard Small-Cap Growth ETF has $7.75 B in assets, iShares Russell 2000 Growth ETF has $10.21 B. VBK has an expense ratio of 0.07% and IWO charges 0.24%.
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 S&P Small-Cap 600 Growth ETF (VIOG) Be on Your Investing Radar?
Looking for broad exposure to the Small Cap Growth segment of the US equity market? You should consider the Vanguard S&P Small-Cap 600 Growth ETF (VIOG - Free Report) , a passively managed exchange traded fund launched on 09/09/2010.
The fund is sponsored by Vanguard. It has amassed assets over $344.58 M, making it one of the average sized ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also 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 0.20%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.80%.
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 Healthcare sector--about 20.50% of the portfolio. Industrials and Information Technology round out the top three.
Looking at individual holdings, Chemed Corp. (CHE - Free Report) accounts for about 1.18% of total assets, followed by Five Below Inc. (FIVE - Free Report) and On Assignment Inc. (ASGN - Free Report) .
The top 10 holdings account for about 9.75% of total assets under management.
Performance and Risk
VIOG seeks to match the performance of the S&P Small-Cap 600 Growth Index before fees and expenses. The S&P SmallCap 600 Growth Index represents the growth companies of the S&P SmallCap 600 Index.
The ETF has gained about 9.93% so far this year and was up about 24.62% in the last one year (as of 05/22/2018). In the past 52-week period, it has traded between $128.65 and $160.27.
The ETF has a beta of 1.02 and standard deviation of 15.61% for the trailing three-year period, making it a medium risk choice in the space. With about 335 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard S&P Small-Cap 600 Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VIOG is a good option for those seeking exposure to the Small Cap ETFs area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Small-Cap Growth ETF (VBK - Free Report) and the iShares Russell 2000 Growth ETF (IWO - Free Report) track a similar index. While Vanguard Small-Cap Growth ETF has $7.75 B in assets, iShares Russell 2000 Growth ETF has $10.21 B. VBK has an expense ratio of 0.07% and IWO charges 0.24%.
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.