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Should Vanguard Small-Cap Value ETF (VBR) Be on Your Investing Radar?
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Launched on 01/26/2004, the Vanguard Small-Cap Value ETF (VBR - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $28.79 billion, making it the largest 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. 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
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 2.10%.
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 Financials sector--about 21.90% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Slcmt1142 accounts for about 1.03% of total assets, followed by Smurfit Westrock Plc (SW - Free Report) and First Citizens Bancshares Inc/nc (FCNCA - 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 gained about 6.52% so far this year and it's up approximately 17.01% in the last one year (as of 09/09/2024). In the past 52-week period, it has traded between $149.18 and $198.45.
The ETF has a beta of 1.13 and standard deviation of 20.31% for the trailing three-year period, making it a medium risk choice in the space. With about 853 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Small-Cap Value 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, VBR is a good option for those seeking exposure to the Style Box - Small Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 Value ETF (IWN - Free Report) and the Avantis U.S. Small Cap Value ETF (AVUV - Free Report) track a similar index. While iShares Russell 2000 Value ETF has $11.90 billion in assets, Avantis U.S. Small Cap Value ETF has $12.45 billion. IWN has an expense ratio of 0.24% and AVUV charges 0.25%.
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 Small-Cap Value ETF (VBR) Be on Your Investing Radar?
Launched on 01/26/2004, the Vanguard Small-Cap Value ETF (VBR - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $28.79 billion, making it the largest 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. 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
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 2.10%.
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 Financials sector--about 21.90% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Slcmt1142 accounts for about 1.03% of total assets, followed by Smurfit Westrock Plc (SW - Free Report) and First Citizens Bancshares Inc/nc (FCNCA - 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 gained about 6.52% so far this year and it's up approximately 17.01% in the last one year (as of 09/09/2024). In the past 52-week period, it has traded between $149.18 and $198.45.
The ETF has a beta of 1.13 and standard deviation of 20.31% for the trailing three-year period, making it a medium risk choice in the space. With about 853 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Small-Cap Value 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, VBR is a good option for those seeking exposure to the Style Box - Small Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 Value ETF (IWN - Free Report) and the Avantis U.S. Small Cap Value ETF (AVUV - Free Report) track a similar index. While iShares Russell 2000 Value ETF has $11.90 billion in assets, Avantis U.S. Small Cap Value ETF has $12.45 billion. IWN has an expense ratio of 0.24% and AVUV charges 0.25%.
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.