Should Vanguard S&P Small-Cap 600 ETF (VIOO) Be on Your Investing Radar?
The Vanguard S&P Small-Cap 600 ETF (VIOO) was launched on 09/09/2010, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $2.57 billion, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 0.10%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.49%.
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 Financials sector--about 18.30% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Ati Inc (ATI) accounts for about 0.67% of total assets, followed by Ensign Group Inc/the (ENSG) and Mueller Industries Inc (MLI).
The top 10 holdings account for about 4.56% of total assets under management.
Performance and Risk
VIOO seeks to match the performance of the S&P SmallCap 600 Index before fees and expenses. The S&P SmallCap 600 Index represents the small-cap segment of the U.S. equity market.
The ETF has lost about -1.37% so far this year and it's up approximately 7.47% in the last one year (as of 07/05/2024). In the past 52-week period, it has traded between $81.22 and $101.79.
The ETF has a beta of 1.12 and standard deviation of 21.29% for the trailing three-year period, making it a medium risk choice in the space. With about 604 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard S&P Small-Cap 600 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, VIOO is a sufficient option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 ETF (IWM) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $58.89 billion in assets, iShares Core S&P Small-Cap ETF has $77.15 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
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 Small-Cap 600 ETF (VIOO): ETF Research Reports
ATI Inc. (ATI) : Free Stock Analysis Report
Mueller Industries, Inc. (MLI) : Free Stock Analysis Report
iShares Russell 2000 ETF (IWM): ETF Research Reports
The Ensign Group, Inc. (ENSG) : Free Stock Analysis Report
iShares Core S&P Small-Cap ETF (IJR): ETF Research Reports
