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Should Vanguard Small-Cap Value ETF (VBR) Be on Your Investing Radar?
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If you're interested in broad exposure to the Small Cap Value segment of the US equity market, look no further than the Vanguard Small-Cap Value ETF (VBR - Free Report) , a passively managed exchange traded fund launched on 01/26/2004.
The fund is sponsored by Vanguard. It has amassed assets over $23.34 billion, making it the largest ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
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. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 2.26%.
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 Industrials sector--about 22.30% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Steel Dynamics Inc. (STLD - Free Report) accounts for about 0.66% of total assets, followed by Idex Corp. (IEX - Free Report) and Atmos Energy Corp. (ATO - Free Report) .
Performance and Risk
VBR seeks to match the performance of the CRSP U.S. Small Cap Value Index before fees and expenses. The CRSP U.S. Small Cap Value Index measures the investment return of small-capitalization value stocks.
The ETF has lost about -1.88% so far this year and is down about -7.81% in the last one year (as of 04/07/2023). In the past 52-week period, it has traded between $143.40 and $178.24.
The ETF has a beta of 1.15 and standard deviation of 25.57% for the trailing three-year period, making it a medium risk choice in the space. With about 880 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Small-Cap 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, VBR is an outstanding 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 S&P Small-Cap 600 Value ETF (IJS - Free Report) and the iShares Russell 2000 Value ETF (IWN - Free Report) track a similar index. While iShares S&P Small-Cap 600 Value ETF has $6.78 billion in assets, iShares Russell 2000 Value ETF has $11.15 billion. IJS has an expense ratio of 0.18% and IWN charges 0.23%.
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 Small-Cap Value ETF (VBR) Be on Your Investing Radar?
If you're interested in broad exposure to the Small Cap Value segment of the US equity market, look no further than the Vanguard Small-Cap Value ETF (VBR - Free Report) , a passively managed exchange traded fund launched on 01/26/2004.
The fund is sponsored by Vanguard. It has amassed assets over $23.34 billion, making it the largest ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
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. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 2.26%.
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 Industrials sector--about 22.30% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Steel Dynamics Inc. (STLD - Free Report) accounts for about 0.66% of total assets, followed by Idex Corp. (IEX - Free Report) and Atmos Energy Corp. (ATO - Free Report) .
Performance and Risk
VBR seeks to match the performance of the CRSP U.S. Small Cap Value Index before fees and expenses. The CRSP U.S. Small Cap Value Index measures the investment return of small-capitalization value stocks.
The ETF has lost about -1.88% so far this year and is down about -7.81% in the last one year (as of 04/07/2023). In the past 52-week period, it has traded between $143.40 and $178.24.
The ETF has a beta of 1.15 and standard deviation of 25.57% for the trailing three-year period, making it a medium risk choice in the space. With about 880 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Small-Cap 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, VBR is an outstanding 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 S&P Small-Cap 600 Value ETF (IJS - Free Report) and the iShares Russell 2000 Value ETF (IWN - Free Report) track a similar index. While iShares S&P Small-Cap 600 Value ETF has $6.78 billion in assets, iShares Russell 2000 Value ETF has $11.15 billion. IJS has an expense ratio of 0.18% and IWN charges 0.23%.
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.