Should VANGDSP4 VALUE (IVOV) Be on Your Investing Radar? Style Box ETF report for IVOV
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Launched on 09/09/2010, the VANGDSP4 VALUE (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 $867.02 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
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 they have a nice balance of growth potential and stability.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
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 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.82%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 21.50% of the portfolio. Industrials and Real Estate round out the top three.
Looking at individual holdings, Jones Lang Lasalle Inc. (JLL) accounts for about 1.01% of total assets, followed by Steel Dynamics Inc. (STLD) and East West Bancorp Inc. (EWBC).
The top 10 holdings account for about 7.33% 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 added about 34.91% so far this year and is up roughly 48.98% in the last one year (as of 11/15/2021). In the past 52-week period, it has traded between $124.39 and $174.86.
The ETF has a beta of 1.26 and standard deviation of 29.15% for the trailing three-year period, making it a medium risk choice in the space. With about 310 holdings, it effectively diversifies company-specific risk.
Alternatives
VANGDSP4 VALUE holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IVOV is an excellent 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 MidCap Value ETF (IWS) and the VANGDMC VALUE (VOE) track a similar index. While iShares Russell MidCap Value ETF has $15.10 billion in assets, VANGDMC VALUE has $15.52 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 MidCap 400 Value ETF (IVOV): ETF Research Reports
Steel Dynamics, Inc. (STLD): Free Stock Analysis Report
Jones Lang LaSalle Incorporated (JLL): Free Stock Analysis Report
East West Bancorp, Inc. (EWBC): Free Stock Analysis Report
Vanguard MidCap Value ETF (VOE): ETF Research Reports
iShares Russell MidCap Value ETF (IWS): ETF Research Reports
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