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 Small-Cap Growth ETF (VBK) Be on Your Investing Radar?
Read MoreHide Full Article
Designed to provide broad exposure to the Small Cap Growth segment of the US equity market, the Vanguard Small-Cap Growth ETF (VBK - Free Report) is a passively managed exchange traded fund launched on 01/26/2004.
The fund is sponsored by Vanguard. It has amassed assets over $18.04 billion, making it the largest ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Additionally, growth stocks have a greater level of risk associated with them. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
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 0.64%.
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 21.60% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Slcmt1142 accounts for about 1.69% of total assets, followed by Targa Resources Corp (TRGP - Free Report) and Deckers Outdoor Corp (DECK - Free Report) .
Performance and Risk
VBK seeks to match the performance of the CRSP U.S. Small Cap Growth Index before fees and expenses. The CRSP U.S. Small Cap Growth Index measures the investment return of small-capitalization growth stocks.
The ETF has added about 11.16% so far this year and was up about 26.61% in the last one year (as of 09/30/2024). In the past 52-week period, it has traded between $196.36 and $267.94.
The ETF has a beta of 1.14 and standard deviation of 24.51% for the trailing three-year period, making it a medium risk choice in the space. With about 631 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Small-Cap Growth 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, VBK is a great option for investors seeking exposure to the Style Box - Small Cap Growth 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 Growth ETF (IJT - Free Report) and the iShares Russell 2000 Growth ETF (IWO - Free Report) track a similar index. While iShares S&P Small-Cap 600 Growth ETF has $6.46 billion in assets, iShares Russell 2000 Growth ETF has $12.06 billion. IJT has an expense ratio of 0.18% and IWO charges 0.24%.
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should Vanguard Small-Cap Growth ETF (VBK) Be on Your Investing Radar?
Designed to provide broad exposure to the Small Cap Growth segment of the US equity market, the Vanguard Small-Cap Growth ETF (VBK - Free Report) is a passively managed exchange traded fund launched on 01/26/2004.
The fund is sponsored by Vanguard. It has amassed assets over $18.04 billion, making it the largest ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Additionally, growth stocks have a greater level of risk associated with them. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
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 0.64%.
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 21.60% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Slcmt1142 accounts for about 1.69% of total assets, followed by Targa Resources Corp (TRGP - Free Report) and Deckers Outdoor Corp (DECK - Free Report) .
Performance and Risk
VBK seeks to match the performance of the CRSP U.S. Small Cap Growth Index before fees and expenses. The CRSP U.S. Small Cap Growth Index measures the investment return of small-capitalization growth stocks.
The ETF has added about 11.16% so far this year and was up about 26.61% in the last one year (as of 09/30/2024). In the past 52-week period, it has traded between $196.36 and $267.94.
The ETF has a beta of 1.14 and standard deviation of 24.51% for the trailing three-year period, making it a medium risk choice in the space. With about 631 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Small-Cap Growth 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, VBK is a great option for investors seeking exposure to the Style Box - Small Cap Growth 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 Growth ETF (IJT - Free Report) and the iShares Russell 2000 Growth ETF (IWO - Free Report) track a similar index. While iShares S&P Small-Cap 600 Growth ETF has $6.46 billion in assets, iShares Russell 2000 Growth ETF has $12.06 billion. IJT has an expense ratio of 0.18% and IWO charges 0.24%.
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.