Launched on 01/26/2004, the Vanguard Consumer Discretionary ETF (VCR) is a passively managed exchange traded fund designed to provide a broad exposure to the Consumer Discretionary - Broad segment of the equity market.
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.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $6.60 billion, making it one of the largest ETFs attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. VCR seeks to match the performance of the MSCI US Investable Market Consumer Discretionary 25/50 Index before fees and expenses.
The MSCI US Investable Market Consumer Discretionary 25/50 Index is designed to transition in and out of securities affected by pending updates to the consumer discretionary sector.
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 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.74%.
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 in the Consumer Discretionary sector--about 99.90% of the portfolio.
Looking at individual holdings, Amazon.com Inc (AMZN) accounts for about 21.63% of total assets, followed by Tesla Inc (TSLA) and Home Depot Inc/the (HD).
Performance and Risk
The ETF return is roughly 25.38% and is up about 25.38% so far this year and in the past one year (as of 12/31/2024), respectively. VCR has traded between $291.88 and $401.37 during this last 52-week period.
The ETF has a beta of 1.32 and standard deviation of 25.18% for the trailing three-year period, making it a medium risk choice in the space. With about 304 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Consumer Discretionary 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, VCR is a sufficient option for those seeking exposure to the Consumer Discretionary ETFs area of the market. Investors might also want to consider some other ETF options in the space.
IShares U.S. Home Construction ETF (ITB) tracks Dow Jones U.S. Select Home Construction Index and the Consumer Discretionary Select Sector SPDR ETF (XLY) tracks Consumer Discretionary Select Sector Index. IShares U.S. Home Construction ETF has $2.82 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $23.10 billion. ITB has an expense ratio of 0.39% and XLY charges 0.09%.
Bottom Line
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.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
The Home Depot, Inc. (HD) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
iShares U.S. Home Construction ETF (ITB): ETF Research Reports
Consumer Discretionary Select Sector SPDR ETF (XLY): ETF Research Reports
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
