A sound investment process and strong management team underpin Vanguard Consumer Discretionary ETF's Morningstar Medalist Rating of Gold. The portfolio maintains a sizable cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy's sensible investment philosophy merits a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an underweight position in quality exposure and yield exposure compared with category peers. Low quality exposure is attributed to stocks with higher financial leverage and lower profitability. And a low yield exposure is rooted in holding fewer stocks with high dividend or buyback yields -- instead, typically holding stocks in an early stage of development. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm a High Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Amazon

Tesla

Home Depot

McDonald's

Lowe's

Booking Hlds

NIKE

Starbucks

Chipotle

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Vanguard Consumer Discretionary Fund earns a High Process Pillar rating. This fund tracks an index, which increases its process rating. Historical data, like Morningstar's Active/Passive Barometer, shows that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. 

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the performance of the MSCI US Investable Market Index/Consumer Discretionary 25/50.  The fund employs an indexing investment approach designed to track the performance of the MSCI US Investable Market Index/Consumer Discretionary 25/50, an index made up of stocks of large, mid-size, and small U.S. companies within the consumer discretionary sector, as classified under the GICS. The Advisor attempts to replicate the target index by seeking to invest all of its assets in the stocks that make up the index, and in order to hold each stock in approximately the same proportion as its weighting in the index. It is non-diversified. 

 The portfolio is overweight in consumer cyclical by 14.0 percentage points in terms of assets compared with the category average, and its financial services allocation is similar to the category. The sectors with low exposure compared to category peers are industrials and consumer defensive, underweight the average by 7.3 and 3.4 percentage points of assets, respectively. The strategy owns 307 securities and is relatively top-heavy. Of the strategy's assets, 56.2% are concentrated within the top 10 holdings, as opposed to the category’s 44.1% average. And finally, in terms of portfolio turnover, on a year-over-year basis, 11% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

High

Process

Vanguard’s equity team is strong compared with others in the industry, resulting in an Above Average People Pillar rating. There are two managers listed on the fund: Nick Birkett, Awais Khan. Overall, management experience is lacking on the team, with only an average of four years spent in the industry. Together, they manage a total of three strategies, with a Gold asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Above Average

People

The Vanguard Group retains a High Parent rating. 

Mutual ownership, low costs, and a direct-to-investor playbook have helped spur Vanguard's leadership within the United States. Client service missteps notwithstanding, Vanguard over the past decade has grown its market share of U.S. open-end and exchange-traded fund assets at about a 5% annualized clip. At that rate, Vanguard's portion of the U.S. industry will cross 50% around 2035.

True, some competitors can now match or even undercut Vanguard on fees for broad market exposure. But Vanguard's burgeoning advice business could help it keep or even extend that lead. Through Digital Advisor and Personal Advisor Services, Vanguard has built an increasingly compelling ecosystem of advice for investors with simple to complex needs.

Vanguard is also using its advice business to expand overseas, but that's a work in progress. Of Vanguard's USD 7.6 trillion in global assets under management in March 2023, non-U.S. investors owned less than 10%, a figure that has changed little in recent years. Strategic shifts in China and other markets account for the slow pace, including returning money to institutions that had been layering on fees. Vanguard hopes to recoup that money and more by focusing on individual investors and the advisors who serve them. Provided Vanguard sticks to its playbook, its advantages should translate into success abroad, too.

Parent

Vanguard Consumer Discretionary ETF

VCR tracks a market-cap-weighted index of stocks in the US Consumer Discretionary sector.

The fund tracks a market cap-weighted index of consumer discretionary companies in the US.

Fidelity MSCI Consumer Discretionary ETF

iShares Evolved U.S. Discretionary Spending ETF

iShares U.S. Consumer Services ETF

iShares Global Consumer Discretionary ETF

Consumer Discretionary Select Sector SPDR Fund

Amazon.com Inc. makes up an outsize share of the biggest consumer discretionary ETFs, a fact investors should keep in mind when researching such a trade.

It’s hard for shoppers to avoid Amazon — even in their ETFs

U.S. stocks have been on a tear lately, and Goldman Sachs now feels that the U.S. economy is ready to bounce back with certain stocks poised to reap the most upside from the economic recovery.

Cyclical ETFs Could Get A Boost, Says Goldman Sachs

Agnico Eagle Mines

Cintas

iShares U.S. Technology ETF

Sleep Number

Block

Materials Select Sector SPDR Fund

Industrial Select Sector SPDR Fund

November has been among the best months for markets over the past decade. All the three major indices have traded positively 80% of the time in November since 2009.

4 Sectors Set to Surge in November: ETFs & Stocks to Buy

First Trust Consumer Discretionary AlphaDEX Fund

Invesco S&P 500 Equal Weight Consumer Discretionary ETF

We study the impact of the drop in consumer confidence on some ETFs.

ETFs in Focus as US Consumer Confidence Drops in October

iShares U.S. Utilities ETF

iShares U.S. Energy ETF

iShares U.S. Healthcare ETF

Vanguard Consumer Staples ETF

Vanguard Utilities ETF

Energy Select Sector SPDR Fund

Financial Select Sector SPDR Fund

Health Care Select Sector SPDR Fund

SPDR S&P Metals & Mining ETF

The Best ETF Sector Portfolio Shifts Today

The escalation in trade and tariff war as well as geopolitical tensions took a toll on consumer confidence last month.

A Look at Consumer ETFs as Confidence Slips

Domino's Pizza

Four Corners Property Trust

Shake Shack

You can profit from investing in the high-growth, easy-to-understand fast-food industry.

How to Invest in Fast-Food Stocks

SPDR S&P Retail ETF

Inside the consumer ETFs that are seesawing between trade attacks and retaliations, and changing stances of the U.S. and China governments.

Consumer ETFs in Focus on Fresh Tariff Threats

Consumer discretionary companies are moving counter to the broad market, which is catching many active traders by surprise.

3 Charts Show Consumer Discretionary Stocks Set to Move

VanEck Vectors Retail ETF

A record number of Prime members shopped for more than 175 million products across 18 countries during the event.

Amazon Prime Day Smashes Record: 5 ETF Deals

Retailers take an aim at Amazon Prime Day and announced a flurry of deals at around the same time to gain some market share. Such deal extravaganza will boost consumer ETFs.

Consumer ETFs Win on Prime Day Becoming "Summer's Black Friday"

ETFs with the highest allocation to Amazon are in focus for the coming days and investors should definitely cash in on the opportune moment when arises.

ETFs in Focus on Amazon's Q1 Earnings Beat

SPDR S&P 500 ETF Trust

Consumer discretionary ETFs have had a stellar run in the 10-year old bull market, having beaten the S&amp;P 500. Will the rally continue?

News for Vanguard Consumer Discretionary ETF ETF (VCR)