We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should Vanguard Mid-Cap ETF (VO) Be on Your Investing Radar?
Read MoreHide Full Article
The Vanguard Mid-Cap ETF (VO - Free Report) was launched on 01/26/2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Blend segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $64.63 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 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 one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.52%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 17.80% of the portfolio. Information Technology and Financials round out the top three.
Looking at individual holdings, Arista Networks Inc (ANET - Free Report) accounts for about 0.96% of total assets, followed by Amphenol Corp (APH - Free Report) and Transdigm Group Inc (TDG - Free Report) .
The top 10 holdings account for about 2.73% 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 return is roughly 6.42% so far this year and was up about 22.98% in the last one year (as of 05/27/2024). In the past 52-week period, it has traded between $195.66 and $249.86.
The ETF has a beta of 1.08 and standard deviation of 18.67% for the trailing three-year period, making it a medium risk choice in the space. With about 340 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mid-Cap 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 a great 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 Mid-Cap ETF (IWR - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) track a similar index. While iShares Russell Mid-Cap ETF has $34.16 billion in assets, iShares Core S&P Mid-Cap ETF has $84.02 billion. IWR has an expense ratio of 0.19% and IJH charges 0.05%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should Vanguard Mid-Cap ETF (VO) Be on Your Investing Radar?
The Vanguard Mid-Cap ETF (VO - Free Report) was launched on 01/26/2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Blend segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $64.63 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 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 one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.52%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 17.80% of the portfolio. Information Technology and Financials round out the top three.
Looking at individual holdings, Arista Networks Inc (ANET - Free Report) accounts for about 0.96% of total assets, followed by Amphenol Corp (APH - Free Report) and Transdigm Group Inc (TDG - Free Report) .
The top 10 holdings account for about 2.73% 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 return is roughly 6.42% so far this year and was up about 22.98% in the last one year (as of 05/27/2024). In the past 52-week period, it has traded between $195.66 and $249.86.
The ETF has a beta of 1.08 and standard deviation of 18.67% for the trailing three-year period, making it a medium risk choice in the space. With about 340 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mid-Cap 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 a great 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 Mid-Cap ETF (IWR - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) track a similar index. While iShares Russell Mid-Cap ETF has $34.16 billion in assets, iShares Core S&P Mid-Cap ETF has $84.02 billion. IWR has an expense ratio of 0.19% and IJH charges 0.05%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.