Looking for broad exposure to the Mid Cap Value segment of the US equity market? You should consider the Vanguard Mid-Cap Value ETF (VOE), a passively managed exchange traded fund launched on 08/17/2006.
The fund is sponsored by Vanguard. It has amassed assets over $17.86 billion, making it the largest 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, companies that fall under this category provide a stable and growth-heavy investment.
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
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 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.05%.
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 Financials sector--about 20.40% of the portfolio. Industrials and Utilities round out the top three.
Looking at individual holdings, Arthur J Gallagher & Co (AJG) accounts for about 1.44% of total assets, followed by Carrier Global Corp (CARR) and Oneok Inc (OKE).
The top 10 holdings account for about 6.88% of total assets under management.
Performance and Risk
VOE seeks to match the performance of the CRSP U.S. Mid Cap Value Index before fees and expenses. The CRSP U.S. Mid Cap Value Index measures the investment return of mid-capitalization value stocks.
The ETF has added roughly 2.78% so far this year and was up about 19.37% in the last one year (as of 01/21/2025). In the past 52-week period, it has traded between $141.77 and $176.18.
The ETF has a beta of 1.05 and standard deviation of 16.41% for the trailing three-year period, making it a medium risk choice in the space. With about 190 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mid-Cap 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, VOE 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 S&P Mid-Cap 400 Value ETF (IJJ) and the iShares Russell Mid-Cap Value ETF (IWS) track a similar index. While iShares S&P Mid-Cap 400 Value ETF has $8.63 billion in assets, iShares Russell Mid-Cap Value ETF has $14.08 billion. IJJ has an expense ratio of 0.18% and IWS charges 0.23%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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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Get it free >>Vanguard Mid-Cap Value ETF (VOE): ETF Research Reports
ONEOK, Inc. (OKE) : Free Stock Analysis Report
Arthur J. Gallagher & Co. (AJG) : Free Stock Analysis Report
iShares S&P Mid-Cap 400 Value ETF (IJJ): ETF Research Reports
iShares Russell Mid-Cap Value ETF (IWS): ETF Research Reports
Carrier Global Corporation (CARR) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
