Should You Invest in the Vanguard Consumer Discretionary ETF (VCR)?

Looking for broad exposure to the Consumer Discretionary - Broad segment of the equity market? You should consider the Vanguard Consumer Discretionary ETF (VCR), a passively managed exchange traded fund launched on 01/26/2004.

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.

Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 11, placing it in bottom 31%.

Index Details

The fund is sponsored by Vanguard. It has amassed assets over $5.34 billion, making it one of the largest ETFs attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. VCR seeks to match the performance of the MSCI US Investable Market Consumer Discretionary 25/50 Index before fees and expenses.

The MSCI US Investable Market Consumer Discretionary 25/50 Index is designed to transition in and out of securities affected by pending updates to the consumer discretionary sector.

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 0.09%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 0.90%.

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 in the Consumer Discretionary sector--about 99.90% of the portfolio.

Looking at individual holdings, Amazon.com Inc (AMZN) accounts for about 22.36% of total assets, followed by Tesla Inc (TSLA) and Home Depot Inc/the (HD).

Performance and Risk

Year-to-date, the Vanguard Consumer Discretionary ETF has lost about -12.78% so far, and is up about 6.19% over the last 12 months (as of 05/07/2025). VCR has traded between $290.42 and $401.37 in this past 52-week period.

The ETF has a beta of 1.30 and standard deviation of 25.05% for the trailing three-year period, making it a medium risk choice in the space. With about 295 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard Consumer Discretionary 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, VCR is a reasonable option for those seeking exposure to the Consumer Discretionary ETFs area of the market. Investors might also want to consider some other ETF options in the space.

IShares U.S. Home Construction ETF (ITB) tracks Dow Jones U.S. Select Home Construction Index and the Consumer Discretionary Select Sector SPDR ETF (XLY) tracks Consumer Discretionary Select Sector Index. IShares U.S. Home Construction ETF has $2.60 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $19.26 billion. ITB has an expense ratio of 0.39% and XLY charges 0.08%.

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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This article originally published on Zacks Investment Research (zacks.com).

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