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Should Vanguard S&P Small-Cap 600 Value ETF (VIOV) Be on Your Investing Radar?
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The Vanguard S&P Small-Cap 600 Value ETF (VIOV - Free Report) was launched on 09/09/2010, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $1.27 billion, making it one of the average sized 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.
While 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
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 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.81%.
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 19.80% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Helmerich & Payne Inc. (HP - Free Report) accounts for about 1.07% of total assets, followed by South Jersey Industries Inc. and Patterson-Uti Energy Inc. (PTEN - Free Report) .
The top 10 holdings account for about 6.21% of total assets under management.
Performance and Risk
VIOV seeks to match the performance of the S&P SmallCap 600 Value Index before fees and expenses. The S&P SmallCap 600 Value Index represents the value companies of the S&P SmallCap 600 Index.
The ETF has gained about 1.08% so far this year and is down about -9.83% in the last one year (as of 03/31/2023). In the past 52-week period, it has traded between $71.39 and $92.09.
The ETF has a beta of 1.19 and standard deviation of 28.28% for the trailing three-year period, making it a medium risk choice in the space. With about 465 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard S&P Small-Cap 600 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, VIOV is a great 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 iShares Russell 2000 Value ETF (IWN - Free Report) and the Vanguard Small-Cap Value ETF (VBR - Free Report) track a similar index. While iShares Russell 2000 Value ETF has $11.17 billion in assets, Vanguard Small-Cap Value ETF has $23.87 billion. IWN has an expense ratio of 0.23% and VBR charges 0.07%.
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 S&P Small-Cap 600 Value ETF (VIOV) Be on Your Investing Radar?
The Vanguard S&P Small-Cap 600 Value ETF (VIOV - Free Report) was launched on 09/09/2010, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $1.27 billion, making it one of the average sized 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.
While 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
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 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.81%.
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 19.80% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Helmerich & Payne Inc. (HP - Free Report) accounts for about 1.07% of total assets, followed by South Jersey Industries Inc. and Patterson-Uti Energy Inc. (PTEN - Free Report) .
The top 10 holdings account for about 6.21% of total assets under management.
Performance and Risk
VIOV seeks to match the performance of the S&P SmallCap 600 Value Index before fees and expenses. The S&P SmallCap 600 Value Index represents the value companies of the S&P SmallCap 600 Index.
The ETF has gained about 1.08% so far this year and is down about -9.83% in the last one year (as of 03/31/2023). In the past 52-week period, it has traded between $71.39 and $92.09.
The ETF has a beta of 1.19 and standard deviation of 28.28% for the trailing three-year period, making it a medium risk choice in the space. With about 465 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard S&P Small-Cap 600 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, VIOV is a great 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 iShares Russell 2000 Value ETF (IWN - Free Report) and the Vanguard Small-Cap Value ETF (VBR - Free Report) track a similar index. While iShares Russell 2000 Value ETF has $11.17 billion in assets, Vanguard Small-Cap Value ETF has $23.87 billion. IWN has an expense ratio of 0.23% and VBR charges 0.07%.
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.