If you're interested in broad exposure to the Mid Cap Value segment of the US equity market, look no further than the Vanguard Mid-Cap Value ETF (VOE), a passively managed exchange traded fund launched on 08/17/2006.
The fund is sponsored by Vanguard. It has amassed assets over $18.31 billion, making it the largest ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. Thus, companies that fall under this category provide a stable and growth-heavy investment.
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. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth 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 2.07%.
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 20.50% of the portfolio. Industrials and Utilities round out the top three.
Looking at individual holdings, Carrier Global Corp (CARR) accounts for about 1.53% of total assets, followed by Arthur J Gallagher & Co (AJG) and Newmont Corp (NEM).
The top 10 holdings account for about 7.85% of total assets under management.
Performance and Risk
VOE seeks to match the performance of the CRSP U.S. Mid Cap Value Index before fees and expenses. The CRSP U.S. Mid Cap Value Index measures the investment return of mid-capitalization value stocks.
The ETF has added about 19.30% so far this year and it's up approximately 29.21% in the last one year (as of 11/19/2024). In the past 52-week period, it has traded between $134.61 and $172.84.
The ETF has a beta of 1.04 and standard deviation of 16.71% for the trailing three-year period, making it a medium risk choice in the space. With about 190 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mid-Cap Value 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, VOE is an excellent option for investors seeking exposure to the Style Box - Mid Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares S&P Mid-Cap 400 Value ETF (IJJ) and the iShares Russell Mid-Cap Value ETF (IWS) track a similar index. While iShares S&P Mid-Cap 400 Value ETF has $8.05 billion in assets, iShares Russell Mid-Cap Value ETF has $13.84 billion. IJJ has an expense ratio of 0.18% and IWS charges 0.23%.
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.
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Get it free >>Vanguard Mid-Cap Value ETF (VOE): ETF Research Reports
Newmont Corporation (NEM) : Free Stock Analysis Report
Arthur J. Gallagher & Co. (AJG) : Free Stock Analysis Report
iShares S&P Mid-Cap 400 Value ETF (IJJ): ETF Research Reports
iShares Russell Mid-Cap Value ETF (IWS): ETF Research Reports
Carrier Global Corporation (CARR) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
