Looking for broad exposure to the Mid Cap Growth segment of the US equity market? You should consider the Vanguard Mid-Cap Growth ETF (VOT), a passively managed exchange traded fund launched on 08/17/2006.
The fund is sponsored by Vanguard. It has amassed assets over $14.26 billion, making it one of the largest ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. Thus, companies that fall under this category provide a stable and growth-heavy investment.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 0.74%.
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 Information Technology sector--about 23.10% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Welltower Inc (WELL) accounts for about 2.49% of total assets, followed by Palantir Technologies Inc (PLTR) and Amphenol Corp (APH).
The top 10 holdings account for about 14.44% of total assets under management.
Performance and Risk
VOT seeks to match the performance of the CRSP U.S. Mid Cap Growth Index before fees and expenses. The CRSP U.S. Mid Cap Growth Index measures the investment return of mid-capitalization growth stocks.
The ETF has lost about -7.40% so far this year and was up about 6.45% in the last one year (as of 04/18/2025). In the past 52-week period, it has traded between $216.28 and $276.98.
The ETF has a beta of 1.16 and standard deviation of 22.43% for the trailing three-year period, making it a medium risk choice in the space. With about 145 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mid-Cap Growth 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, VOT is an excellent option for investors seeking exposure to the Style Box - Mid Cap Growth 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 Growth ETF (IJK) and the iShares Russell Mid-Cap Growth ETF (IWP) track a similar index. While iShares S&P Mid-Cap 400 Growth ETF has $8.01 billion in assets, iShares Russell Mid-Cap Growth ETF has $16.14 billion. IJK has an expense ratio of 0.17% and IWP charges 0.23%.
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.
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Vanguard Mid-Cap Growth ETF (VOT): ETF Research Reports Amphenol Corporation (APH): Free Stock Analysis Report iShares Russell Mid-Cap Growth ETF (IWP): ETF Research Reports iShares S&P Mid-Cap 400 Growth ETF (IJK): ETF Research Reports Welltower Inc. (WELL): Free Stock Analysis Report Palantir Technologies Inc. (PLTR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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