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Should Vanguard S&P SmallCap 600 Growth ETF (VIOG) Be on Your Investing Radar?

Style Box ETF report for VIOG

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This story originally appeared on Zacks

Launched on 09/09/2010, the Vanguard S&P SmallCap 600 Growth ETF (VIOG) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Growth segment of the US equity market.

- Zacks

The fund is sponsored by Vanguard. It has amassed assets over $548.83 million, making it one of the average sized ETFs attempting to match the Small Cap Growth segment of the US equity market.

Why Small Cap Growth

With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.

While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.

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 0.15%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 0.75%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector--about 20.40% of the portfolio. Industrials and Healthcare round out the top three.

Looking at individual holdings, Crocs Inc. (CROX) accounts for about 1.36% of total assets, followed by Saia Inc. (SAIA) and Omnicell Inc. (OMCL).

The top 10 holdings account for about 9.89% of total assets under management.

Performance and Risk

VIOG seeks to match the performance of the S&P Small-Cap 600 Growth Index before fees and expenses. The S&P SmallCap 600 Growth Index represents the growth companies of the S&P SmallCap 600 Index.

The ETF return is roughly 16.76% so far this year and was up about 39.31% in the last one year (as of 10/14/2021). In the past 52-week period, it has traded between $154.28 and $236.23.

The ETF has a beta of 1.18 and standard deviation of 29.06% for the trailing three-year period, making it a medium risk choice in the space. With about 333 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard S&P SmallCap 600 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, VIOG is an outstanding option for investors seeking exposure to the Style Box - Small Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.

The iShares Russell 2000 Growth ETF (IWO) and the Vanguard SmallCap Growth ETF (VBK) track a similar index. While iShares Russell 2000 Growth ETF has $11.95 billion in assets, Vanguard SmallCap Growth ETF has $15.89 billion. IWO has an expense ratio of 0.24% and VBK charges 0.07%.

Bottom-Line

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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 S&P SmallCap 600 Growth ETF (VIOG): ETF Research Reports

 

Omnicell, Inc. (OMCL): Free Stock Analysis Report

 

Crocs, Inc. (CROX): Free Stock Analysis Report

 

Saia, Inc. (SAIA): Free Stock Analysis Report

 

iShares Russell 2000 Growth ETF (IWO): ETF Research Reports

 

Vanguard SmallCap Growth ETF (VBK): ETF Research Reports

 

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