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Should Vanguard MidCap ETF (VO) Be on Your Investing Radar?
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The Vanguard MidCap ETF (VO - Free Report) was launched on 01/26/2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Blend segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $53 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, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.04%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.24%.
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 22.30% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Dexcom Inc. (DXCM - Free Report) accounts for about 0.77% of total assets, followed by Marvell Technology Inc. (MRVL - Free Report) and Msci Inc. (MSCI - Free Report) .
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 lost about -8.78% so far this year and is up about 8.30% in the last one year (as of 03/04/2022). In the past 52-week period, it has traded between $214.97 and $261.20.
The ETF has a beta of 1.09 and standard deviation of 24.35% for the trailing three-year period, making it a medium risk choice in the space. With about 381 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard MidCap 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 a great 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 MidCap ETF (IWR - Free Report) and the iShares Core S&P MidCap ETF (IJH - Free Report) track a similar index. While iShares Russell MidCap ETF has $29.09 billion in assets, iShares Core S&P MidCap ETF has $64.75 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 MidCap ETF (VO) Be on Your Investing Radar?
The Vanguard MidCap ETF (VO - Free Report) was launched on 01/26/2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Blend segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $53 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, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.04%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.24%.
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 22.30% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Dexcom Inc. (DXCM - Free Report) accounts for about 0.77% of total assets, followed by Marvell Technology Inc. (MRVL - Free Report) and Msci Inc. (MSCI - Free Report) .
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 lost about -8.78% so far this year and is up about 8.30% in the last one year (as of 03/04/2022). In the past 52-week period, it has traded between $214.97 and $261.20.
The ETF has a beta of 1.09 and standard deviation of 24.35% for the trailing three-year period, making it a medium risk choice in the space. With about 381 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard MidCap 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 a great 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 MidCap ETF (IWR - Free Report) and the iShares Core S&P MidCap ETF (IJH - Free Report) track a similar index. While iShares Russell MidCap ETF has $29.09 billion in assets, iShares Core S&P MidCap ETF has $64.75 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.