Should You Invest in the Vanguard Industrials ETF (VIS)?

Launched on 09/23/2004, the Vanguard Industrials ETF (VIS) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - Broad segment of the equity market.

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.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.

Index Details

The fund is sponsored by Vanguard. It has amassed assets over $5.37 billion, making it one of the largest ETFs attempting to match the performance of the Industrials - Broad segment of the equity market. VIS seeks to match the performance of the MSCI US Investable Market Industrials 25/50 Index before fees and expenses.

The MSCI US Investable Market Index (IMI)/Industrials 25/50 is made up of stocks of large, mid-size, and small U.S. companies within the industrials sector.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.24%.

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 in the Industrials sector--about 99.90% of the portfolio.

Looking at individual holdings, General Electric Co (GE) accounts for about 3.45% of total assets, followed by Caterpillar Inc (CAT) and Union Pacific Corp (UNP).

Performance and Risk

So far this year, VIS return is roughly 10.24%, and was up about 29.62% in the last one year (as of 05/22/2024). During this past 52-week period, the fund has traded between $183.76 and $244.15.

The ETF has a beta of 1.12 and standard deviation of 17.91% for the trailing three-year period, making it a medium risk choice in the space. With about 393 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard Industrials 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, VIS is a good option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.

First Trust Industrials/Producer Durables AlphaDEX ETF (FXR) tracks StrataQuant Industrials Index and the Industrial Select Sector SPDR ETF (XLI) tracks Industrial Select Sector Index. First Trust Industrials/Producer Durables AlphaDEX ETF has $1.94 billion in assets, Industrial Select Sector SPDR ETF has $18.61 billion. FXR has an expense ratio of 0.61% and XLI charges 0.09%.

Bottom Line

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 Industrials ETF (VIS): ETF Research Reports

GE Aerospace (GE) : Free Stock Analysis Report

Caterpillar Inc. (CAT) : Free Stock Analysis Report

Union Pacific Corporation (UNP) : Free Stock Analysis Report

Industrial Select Sector SPDR ETF (XLI): ETF Research Reports

First Trust Industrials/Producer Durables AlphaDEX ETF (FXR): ETF Research Reports

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.

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