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Looking for broad exposure to the Mid Cap Blend segment of the US equity market? You should consider the Vanguard S&P MidCap 400 ETF (IVOO), a passively managed exchange traded fund launched on 09/09/2010.
The fund is sponsored by Vanguard. It has amassed assets over $1.39 billion, making it one of the average sized ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. Thus, companies that fall under this category provide a stable and growth-heavy investment.
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.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.10%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.36%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Molina Healthcare Inc. (MOH) accounts for about 0.73% of total assets, followed by Camden Property Trust (CPT) and Medical Properties Trust Inc. (MPW).
The top 10 holdings account for about 4.32% of total assets under management.
Performance and Risk
IVOO seeks to match the performance of the S&P MidCap 400 Index before fees and expenses. The S&P MidCap 400 Index measures the performance of the mid-cap segment of the U.S. equity universe. The Index is a capitalization-weighted index composed of 400 domestic common stocks.
The ETF has lost about -14.38% so far this year and is down about -8.30% in the last one year (as of 05/26/2022). In the past 52-week period, it has traded between $158.53 and $196.68.
The ETF has a beta of 1.12 and standard deviation of 28.33% for the trailing three-year period, making it a medium risk choice in the space. With about 404 holdings, it effectively diversifies company-specific risk.
Vanguard S&P MidCap 400 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, IVOO is a great option for investors seeking exposure to the Style Box - Mid Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard MidCap ETF (VO) and the iShares Core S&P MidCap ETF (IJH) track a similar index. While Vanguard MidCap ETF has $49.02 billion in assets, iShares Core S&P MidCap ETF has $59.57 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
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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Vanguard S&P MidCap 400 ETF (IVOO): ETF Research Reports
Molina Healthcare, Inc (MOH) : Free Stock Analysis Report
Medical Properties Trust, Inc. (MPW) : Free Stock Analysis Report
Camden Property Trust (CPT) : Free Stock Analysis Report
iShares Core S&P MidCap ETF (IJH): ETF Research Reports
Vanguard MidCap ETF (VO): ETF Research Reports
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