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Should Vanguard Small-Cap Value ETF (VBR) Be on Your Investing Radar?
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If you're interested in broad exposure to the Small Cap Value segment of the US equity market, look no further than the Vanguard Small-Cap Value ETF (VBR - Free Report) , a passively managed exchange traded fund launched on 01/26/2004.
The fund is sponsored by Vanguard. It has amassed assets over $27.61 billion, making it the largest ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
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.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 2.11%.
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 24.50% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Builders Firstsource Inc (BLDR - Free Report) accounts for about 0.79% of total assets, followed by Slcmt1142 and Booz Allen Hamilton Holding Corp (BAH - Free Report) .
The top 10 holdings account for about 5.98% of total assets under management.
Performance and Risk
VBR seeks to match the performance of the CRSP U.S. Small Cap Value Index before fees and expenses. The CRSP U.S. Small Cap Value Index measures the investment return of small-capitalization value stocks.
The ETF has gained about 2.09% so far this year and is up about 21.15% in the last one year (as of 05/03/2024). In the past 52-week period, it has traded between $149.18 and $191.88.
The ETF has a beta of 1.15 and standard deviation of 20.45% for the trailing three-year period, making it a medium risk choice in the space. With about 860 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Small-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, VBR is an outstanding option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Avantis U.S. Small Cap Value ETF (AVUV - Free Report) and the iShares Russell 2000 Value ETF (IWN - Free Report) track a similar index. While Avantis U.S. Small Cap Value ETF has $10.84 billion in assets, iShares Russell 2000 Value ETF has $11.83 billion. AVUV has an expense ratio of 0.25% and IWN charges 0.24%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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 Small-Cap Value ETF (VBR) Be on Your Investing Radar?
If you're interested in broad exposure to the Small Cap Value segment of the US equity market, look no further than the Vanguard Small-Cap Value ETF (VBR - Free Report) , a passively managed exchange traded fund launched on 01/26/2004.
The fund is sponsored by Vanguard. It has amassed assets over $27.61 billion, making it the largest ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
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.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 2.11%.
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 24.50% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Builders Firstsource Inc (BLDR - Free Report) accounts for about 0.79% of total assets, followed by Slcmt1142 and Booz Allen Hamilton Holding Corp (BAH - Free Report) .
The top 10 holdings account for about 5.98% of total assets under management.
Performance and Risk
VBR seeks to match the performance of the CRSP U.S. Small Cap Value Index before fees and expenses. The CRSP U.S. Small Cap Value Index measures the investment return of small-capitalization value stocks.
The ETF has gained about 2.09% so far this year and is up about 21.15% in the last one year (as of 05/03/2024). In the past 52-week period, it has traded between $149.18 and $191.88.
The ETF has a beta of 1.15 and standard deviation of 20.45% for the trailing three-year period, making it a medium risk choice in the space. With about 860 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Small-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, VBR is an outstanding option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Avantis U.S. Small Cap Value ETF (AVUV - Free Report) and the iShares Russell 2000 Value ETF (IWN - Free Report) track a similar index. While Avantis U.S. Small Cap Value ETF has $10.84 billion in assets, iShares Russell 2000 Value ETF has $11.83 billion. AVUV has an expense ratio of 0.25% and IWN charges 0.24%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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.