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Should Vanguard MidCap Value ETF (VOE) Be on Your Investing Radar?
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Designed to provide broad exposure to the Mid Cap Value segment of the US equity market, the Vanguard MidCap Value ETF (VOE - Free Report) is a passively managed exchange traded fund launched on 08/17/2006.
The fund is sponsored by Vanguard. It has amassed assets over $15.76 billion, making it the largest ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
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. These types of companies, then, have a good balance of stability and growth potential.
Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
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 1.96%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 17.50% of the portfolio. Utilities and Real Estate round out the top three.
Looking at individual holdings, Occidental Petroleum Corp. (OXY - Free Report) accounts for about 1.75% of total assets, followed by Valero Energy Corp. (VLO - Free Report) and Corteva Inc. (CTVA - Free Report) .
The top 10 holdings account for about 11.84% of total assets under management.
Performance and Risk
VOE seeks to match the performance of the CRSP U.S. Mid Cap Value Index before fees and expenses. The CRSP U.S. Mid Cap Value Index measures the investment return of mid-capitalization value stocks.
The ETF has lost about -7.63% so far this year and is down about -0.54% in the last one year (as of 08/03/2022). In the past 52-week period, it has traded between $126.20 and $153.17.
The ETF has a beta of 1.05 and standard deviation of 26.85% for the trailing three-year period, making it a medium risk choice in the space. With about 203 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard MidCap 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, VOE is an excellent option for investors seeking exposure to the Style Box - Mid Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares S&P MidCap 400 Value ETF (IJJ - Free Report) and the iShares Russell MidCap Value ETF (IWS - Free Report) track a similar index. While iShares S&P MidCap 400 Value ETF has $7.62 billion in assets, iShares Russell MidCap Value ETF has $13.27 billion. IJJ has an expense ratio of 0.18% and IWS charges 0.23%.
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 Value ETF (VOE) Be on Your Investing Radar?
Designed to provide broad exposure to the Mid Cap Value segment of the US equity market, the Vanguard MidCap Value ETF (VOE - Free Report) is a passively managed exchange traded fund launched on 08/17/2006.
The fund is sponsored by Vanguard. It has amassed assets over $15.76 billion, making it the largest ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
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. These types of companies, then, have a good balance of stability and growth potential.
Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
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 1.96%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 17.50% of the portfolio. Utilities and Real Estate round out the top three.
Looking at individual holdings, Occidental Petroleum Corp. (OXY - Free Report) accounts for about 1.75% of total assets, followed by Valero Energy Corp. (VLO - Free Report) and Corteva Inc. (CTVA - Free Report) .
The top 10 holdings account for about 11.84% of total assets under management.
Performance and Risk
VOE seeks to match the performance of the CRSP U.S. Mid Cap Value Index before fees and expenses. The CRSP U.S. Mid Cap Value Index measures the investment return of mid-capitalization value stocks.
The ETF has lost about -7.63% so far this year and is down about -0.54% in the last one year (as of 08/03/2022). In the past 52-week period, it has traded between $126.20 and $153.17.
The ETF has a beta of 1.05 and standard deviation of 26.85% for the trailing three-year period, making it a medium risk choice in the space. With about 203 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard MidCap 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, VOE is an excellent option for investors seeking exposure to the Style Box - Mid Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares S&P MidCap 400 Value ETF (IJJ - Free Report) and the iShares Russell MidCap Value ETF (IWS - Free Report) track a similar index. While iShares S&P MidCap 400 Value ETF has $7.62 billion in assets, iShares Russell MidCap Value ETF has $13.27 billion. IJJ has an expense ratio of 0.18% and IWS charges 0.23%.
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.