Should Vanguard S&P Mid-Cap 400 Value ETF (IVOV) Be on Your Investing Radar?
Launched on 09/09/2010, the Vanguard S&P Mid-Cap 400 Value ETF (IVOV) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $834.36 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
With market capitalization between $2 billion and $10 billion, mid cap companies usually contain higher growth prospects than large cap companies, and are considered less risky than their small cap counterparts. Thus they have a nice balance of growth potential and stability.
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. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
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 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.56%.
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 to the Industrials sector--about 20% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Jabil Inc (JBL) accounts for about 1.37% of total assets, followed by Equity Lifestyle Properties Inc (ELS) and Reinsurance Group Of America Inc (RGA).
The top 10 holdings account for about 9.18% 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 has lost about -2.04% so far this year and was up about 4.47% in the last one year (as of 02/27/2024). In the past 52-week period, it has traded between $71.80 and $88.58.
The ETF has a beta of 1.19 and standard deviation of 20.41% for the trailing three-year period, making it a medium risk choice in the space. With about 293 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 a great 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 $13.28 billion in assets, Vanguard Mid-Cap Value ETF has $16.38 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
Jabil, Inc. (JBL) : Free Stock Analysis Report
Reinsurance Group of America, Incorporated (RGA) : Free Stock Analysis Report
Equity Lifestyle Properties, Inc. (ELS) : Free Stock Analysis Report
Vanguard Mid-Cap Value ETF (VOE): ETF Research Reports
iShares Russell Mid-Cap Value ETF (IWS): ETF Research Reports
