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Should Vanguard MidCap ETF (VO) Be on Your Investing Radar?
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Launched on 01/26/2004, the Vanguard MidCap 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 $46.99 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
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. These types of companies, then, have a good balance of stability and growth potential.
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 the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.44%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 17.20% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Occidental Petroleum Corp. (OXY - Free Report) accounts for about 0.96% of total assets, followed by Valero Energy Corp. (VLO - Free Report) and Devon Energy Corp. (DVN - Free Report) .
The top 10 holdings account for about 7.36% 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 lost about -20.60% so far this year and is down about -15.21% in the last one year (as of 07/06/2022). In the past 52-week period, it has traded between $190.36 and $261.20.
The ETF has a beta of 1.08 and standard deviation of 25.82% for the trailing three-year period, making it a medium risk choice in the space. With about 376 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 an excellent 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 $26.01 billion in assets, iShares Core S&P MidCap ETF has $56.60 billion. IWR has an expense ratio of 0.19% and IJH charges 0.05%.
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 MidCap ETF (VO) Be on Your Investing Radar?
Launched on 01/26/2004, the Vanguard MidCap 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 $46.99 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
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. These types of companies, then, have a good balance of stability and growth potential.
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 the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.44%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 17.20% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Occidental Petroleum Corp. (OXY - Free Report) accounts for about 0.96% of total assets, followed by Valero Energy Corp. (VLO - Free Report) and Devon Energy Corp. (DVN - Free Report) .
The top 10 holdings account for about 7.36% 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 lost about -20.60% so far this year and is down about -15.21% in the last one year (as of 07/06/2022). In the past 52-week period, it has traded between $190.36 and $261.20.
The ETF has a beta of 1.08 and standard deviation of 25.82% for the trailing three-year period, making it a medium risk choice in the space. With about 376 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 an excellent 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 $26.01 billion in assets, iShares Core S&P MidCap ETF has $56.60 billion. IWR has an expense ratio of 0.19% and IJH charges 0.05%.
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.