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Should Vanguard S&P Small-Cap 600 ETF (VIOO) Be on Your Investing Radar?
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Launched on 09/09/2010, the Vanguard S&P Small-Cap 600 ETF (VIOO - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $2.82 billion, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
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.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.40%.
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 20% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Slcmt1142 accounts for about 0.86% of total assets, followed by Ati Inc (ATI - Free Report) and Mueller Industries Inc (MLI - Free Report) .
The top 10 holdings account for about 2.1% of total assets under management.
Performance and Risk
VIOO seeks to match the performance of the S&P SmallCap 600 Index before fees and expenses. The S&P SmallCap 600 Index represents the small-cap segment of the U.S. equity market.
The ETF has added about 4.96% so far this year and is up roughly 12.43% in the last one year (as of 09/05/2024). In the past 52-week period, it has traded between $81.22 and $109.09.
The ETF has a beta of 1.11 and standard deviation of 21.65% for the trailing three-year period, making it a medium risk choice in the space. With about 610 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard S&P Small-Cap 600 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, VIOO is a sufficient option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P Small-Cap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $68.98 billion in assets, iShares Core S&P Small-Cap ETF has $84.08 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 ETF (VIOO) Be on Your Investing Radar?
Launched on 09/09/2010, the Vanguard S&P Small-Cap 600 ETF (VIOO - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $2.82 billion, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
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.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.40%.
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 20% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Slcmt1142 accounts for about 0.86% of total assets, followed by Ati Inc (ATI - Free Report) and Mueller Industries Inc (MLI - Free Report) .
The top 10 holdings account for about 2.1% of total assets under management.
Performance and Risk
VIOO seeks to match the performance of the S&P SmallCap 600 Index before fees and expenses. The S&P SmallCap 600 Index represents the small-cap segment of the U.S. equity market.
The ETF has added about 4.96% so far this year and is up roughly 12.43% in the last one year (as of 09/05/2024). In the past 52-week period, it has traded between $81.22 and $109.09.
The ETF has a beta of 1.11 and standard deviation of 21.65% for the trailing three-year period, making it a medium risk choice in the space. With about 610 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard S&P Small-Cap 600 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, VIOO is a sufficient option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P Small-Cap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $68.98 billion in assets, iShares Core S&P Small-Cap ETF has $84.08 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.