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Should Vanguard Mid-Cap Growth ETF (VOT) Be on Your Investing Radar?
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Launched on 08/17/2006, the Vanguard Mid-Cap Growth ETF (VOT - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Growth segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $12.97 billion, making it one of the largest ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
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. Thus, companies that fall under this category provide a stable and growth-heavy investment.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
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 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.70%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, 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 27.90% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Arista Networks Inc (ANET - Free Report) accounts for about 2.05% of total assets, followed by Amphenol Corp (APH - Free Report) and Transdigm Group Inc (TDG - Free Report) .
The top 10 holdings account for about 12.03% of total assets under management.
Performance and Risk
VOT seeks to match the performance of the CRSP U.S. Mid Cap Growth Index before fees and expenses. The CRSP U.S. Mid Cap Growth Index measures the investment return of mid-capitalization growth stocks.
The ETF has added about 4.48% so far this year and was up about 20.76% in the last one year (as of 06/03/2024). In the past 52-week period, it has traded between $180.90 and $235.79.
The ETF has a beta of 1.11 and standard deviation of 22.52% for the trailing three-year period, making it a medium risk choice in the space. With about 155 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mid-Cap Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VOT is a sufficient option for those seeking exposure to the Style Box - Mid Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The iShares S&P Mid-Cap 400 Growth ETF (IJK - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While iShares S&P Mid-Cap 400 Growth ETF has $9.64 billion in assets, iShares Russell Mid-Cap Growth ETF has $13.91 billion. IJK has an expense ratio of 0.17% and IWP 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 Mid-Cap Growth ETF (VOT) Be on Your Investing Radar?
Launched on 08/17/2006, the Vanguard Mid-Cap Growth ETF (VOT - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Growth segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $12.97 billion, making it one of the largest ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
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. Thus, companies that fall under this category provide a stable and growth-heavy investment.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
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 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.70%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, 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 27.90% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Arista Networks Inc (ANET - Free Report) accounts for about 2.05% of total assets, followed by Amphenol Corp (APH - Free Report) and Transdigm Group Inc (TDG - Free Report) .
The top 10 holdings account for about 12.03% of total assets under management.
Performance and Risk
VOT seeks to match the performance of the CRSP U.S. Mid Cap Growth Index before fees and expenses. The CRSP U.S. Mid Cap Growth Index measures the investment return of mid-capitalization growth stocks.
The ETF has added about 4.48% so far this year and was up about 20.76% in the last one year (as of 06/03/2024). In the past 52-week period, it has traded between $180.90 and $235.79.
The ETF has a beta of 1.11 and standard deviation of 22.52% for the trailing three-year period, making it a medium risk choice in the space. With about 155 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mid-Cap Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VOT is a sufficient option for those seeking exposure to the Style Box - Mid Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The iShares S&P Mid-Cap 400 Growth ETF (IJK - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While iShares S&P Mid-Cap 400 Growth ETF has $9.64 billion in assets, iShares Russell Mid-Cap Growth ETF has $13.91 billion. IJK has an expense ratio of 0.17% and IWP 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.