Should Vanguard Extended Market ETF (VXF) Be on Your Investing Radar?

Launched on 12/27/2001, the Vanguard Extended Market ETF (VXF) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Blend segment of the US equity market.

The fund is sponsored by Vanguard. It has amassed assets over $18.18 billion, making it one of the larger ETFs attempting to match the Mid Cap Blend segment of the US equity market.

Why Mid Cap Blend

Mid cap companies have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. Thus, companies that fall under this category provide a stable and growth-heavy investment.

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 0.06%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.22%.

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 Industrials sector--about 19.40% of the portfolio. Information Technology and Financials round out the top three.

Looking at individual holdings, Uber Technologies Inc (UBER) accounts for about 1.85% of total assets, followed by Snowflake Inc (SNOW) and Workday Inc (WDAY).

Performance and Risk

VXF seeks to match the performance of the S&P Completion Index before fees and expenses. The S&P Completion Index contains all of the U.S. common stocks regularly traded on the New York Stock Exchange and the Nasdaq over-the-counter market, except those stocks included in the S&P 500 Index.

The ETF return is roughly 3.84% so far this year and is up about 27.25% in the last one year (as of 03/12/2024). In the past 52-week period, it has traded between $132.07 and $172.34.

The ETF has a beta of 1.19 and standard deviation of 23.21% for the trailing three-year period, making it a medium risk choice in the space. With about 3597 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard Extended Market 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, VXF is a sufficient option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.

The Vanguard Mid-Cap ETF (VO) and the iShares Core S&P Mid-Cap ETF (IJH) track a similar index. While Vanguard Mid-Cap ETF has $62.79 billion in assets, iShares Core S&P Mid-Cap ETF has $82.24 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.

Bottom-Line

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.

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 >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Vanguard Extended Market ETF (VXF): ETF Research Reports

Workday, Inc. (WDAY) : Free Stock Analysis Report

Snowflake Inc. (SNOW) : Free Stock Analysis Report

iShares Core S&P Mid-Cap ETF (IJH): ETF Research Reports

Vanguard Mid-Cap ETF (VO): ETF Research Reports

Uber Technologies, Inc. (UBER) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.