Yahoo Finance Should Vanguard S&P Mid-Cap 400 Value ETF (IVOV) Be on Your Investing Radar?
Looking for broad exposure to the Mid Cap Value segment of the US equity market? You should consider the Vanguard S&P Mid-Cap 400 Value ETF (IVOV), a passively managed exchange traded fund launched on 09/09/2010.
The fund is sponsored by Vanguard. It has amassed assets over $879.01 million, making it one of the average sized 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 they have a nice balance of growth potential and stability.
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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.47%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 25.10% of the portfolio. Industrials and Real Estate round out the top three.
Looking at individual holdings, Illumina Inc (ILMN) accounts for about 1.43% of total assets, followed by Reinsurance Group Of America Inc (RGA) and Tenet Healthcare Corp (THC).
The top 10 holdings account for about 9.1% of total assets under management.
Performance and Risk
IVOV seeks to match the performance of the S&P MidCap 400 Value Index before fees and expenses. The S&P MidCap 400 Value Index measures the performance of value stocks of medium-size U.S. companies.
The ETF return is roughly 3.83% so far this year and was up about 12.92% in the last one year (as of 09/09/2024). In the past 52-week period, it has traded between $71.80 and $94.67.
The ETF has a beta of 1.16 and standard deviation of 19.88% for the trailing three-year period, making it a medium risk choice in the space. With about 295 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard S&P Mid-Cap 400 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, IVOV is an outstanding 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 Russell Mid-Cap Value ETF (IWS) and the Vanguard Mid-Cap Value ETF (VOE) track a similar index. While iShares Russell Mid-Cap Value ETF has $13.01 billion in assets, Vanguard Mid-Cap Value ETF has $17.01 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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 Mid-Cap 400 Value ETF (IVOV): ETF Research Reports
Illumina, Inc. (ILMN) : Free Stock Analysis Report
Tenet Healthcare Corporation (THC) : Free Stock Analysis Report
Reinsurance Group of America, Incorporated (RGA) : Free Stock Analysis Report
Vanguard Mid-Cap Value ETF (VOE): ETF Research Reports
iShares Russell Mid-Cap Value ETF (IWS): ETF Research Reports
