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Should Vanguard MidCap ETF (VO) Be on Your Investing Radar?
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Designed to provide broad exposure to the Mid Cap Blend segment of the US equity market, the Vanguard MidCap ETF (VO - Free Report) is a passively managed exchange traded fund launched on 01/26/2004.
The fund is sponsored by Vanguard. It has amassed assets over $51.20 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 usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 1.55%.
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 Information Technology sector--about 16.20% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Synopsys Inc. (SNPS - Free Report) accounts for about 0.87% of total assets, followed by Centene Corp. (CNC - Free Report) and Cadence Design Systems Inc. (CDNS - Free Report) .
The top 10 holdings account for about 7.15% 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 added roughly 3.14% so far this year and is down about -12.94% in the last one year (as of 01/11/2023). In the past 52-week period, it has traded between $186.57 and $247.94.
The ETF has a beta of 1.07 and standard deviation of 27.21% for the trailing three-year period, making it a medium risk choice in the space. With about 366 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 outstanding 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 $28.14 billion in assets, iShares Core S&P MidCap ETF has $65.75 billion. IWR has an expense ratio of 0.18% and IJH charges 0.05%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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?
Designed to provide broad exposure to the Mid Cap Blend segment of the US equity market, the Vanguard MidCap ETF (VO - Free Report) is a passively managed exchange traded fund launched on 01/26/2004.
The fund is sponsored by Vanguard. It has amassed assets over $51.20 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 usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 1.55%.
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 Information Technology sector--about 16.20% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Synopsys Inc. (SNPS - Free Report) accounts for about 0.87% of total assets, followed by Centene Corp. (CNC - Free Report) and Cadence Design Systems Inc. (CDNS - Free Report) .
The top 10 holdings account for about 7.15% 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 added roughly 3.14% so far this year and is down about -12.94% in the last one year (as of 01/11/2023). In the past 52-week period, it has traded between $186.57 and $247.94.
The ETF has a beta of 1.07 and standard deviation of 27.21% for the trailing three-year period, making it a medium risk choice in the space. With about 366 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 outstanding 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 $28.14 billion in assets, iShares Core S&P MidCap ETF has $65.75 billion. IWR has an expense ratio of 0.18% and IJH charges 0.05%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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.