A sound investment process and strong management team underpin Vanguard S&P Small-Cap 600 Value ETF's Morningstar Medalist Rating of Silver. The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy merits an Above Average Process Pillar rating. 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, Process 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

Alaska Air Group

Lincoln National

Mr. Cooper Group Inc

Advance Auto Parts

Academy Sports and Outdoors

Organon & Co

Jackson Financial

Dycom Industries

Air Lease

DXC Technology

The S&P SmallCap 600 Value Index assigns a growth and value score to each stock in the S&P SmallCap 600 Index. It allocates the cheapest third to the value index, while it sweeps the fastest growing third into the S&P SmallCap 600 Growth Index. The approach splits the middle third between the two indexes based on their style traits until the market cap for each amounts to approximately half of the S&P SmallCap 600 Index.

This approach admits some blend and growth names into the value index, improving its breadth across the value-growth spectrum. Almost 30% of its portfolio overlaps with the S&P SmallCap 600 Growth Index.

S&P requires all new entrants to be profitable to join the index, but stocks whose profits turn negative can remain in the index for a while. That should reduce the number of struggling companies included in the portfolio and should give the fund a modest quality tilt. Tiny and unprofitable firms usually perform best during market rallies, but they also tend to fall especially quickly when markets sour. This extra step is unique among index fund peers and should effectively control risk in an otherwise risky category.

The portfolio features smaller companies than most of its peers in the small-value category. This fund's average market cap was just $1.8 billion at 2023's end, which is less than half that of the typical peer. Average constituent size is smaller because this index is filled only after its larger siblings, the S&P MidCap 400 Index and S&P 500, claim the largest 900 profitable companies in the United States. As of July 2023, only stocks with market caps between $850 million and $5.2 billion qualified for the S&P SmallCap 600 Index.

The fund's broad reach minimizes stock-specific risk. The portfolio usually holds around 460 stocks with less than 8% of fund assets allocated to its largest 10. Market-cap weighting contributes to this excellent diversification, minimizing the risk of a single stock having an outsize impact on fund performance. No one position claims more than 1% of the portfolio.

The portfolio's sector composition looks a little different than its average peer because of its smaller size and the blend stocks it holds. Tighter market-cap constraints than most peers mean that the fund does not hold some stocks common to competitor portfolios, further shaping portfolio differences relative to the category average. The fund has underweighted financials stocks in recent years while overweighting healthcare and real estate companies relative to the category norm. These differences will drive differences in short-term returns. But the fund’s small size, low fee, and sound diversification should carve out a durable advantage over the long term.

Note: The Process Pillar rating and analysis are indirectly assigned by an analyst. When an analyst covers a passively managed vehicle that tracks a particular index, Morningstar associates the Process Pillar rating assigned to that vehicle with the index concerned. Morningstar then maps the Process Pillar associated with a given index to any other uncovered passive strategies that track the same index. This ensures that the analyst’s view is leveraged whenever available and promotes consistency when analyzing passive vehicles associated with a given index.

Above Average

Process

Vanguard S&P Small-Cap 600 Value Idx Fd benefits considerably from its equity team, earning it an Above Average People Pillar rating. There are two managers listed on the fund: Kenny Narzikul, Nick Birkett. The team is largely unproven, as its members only average two years of portfolio management experience. Together, they manage a total of six strategies, with a Silver asset-weighted average Morningstar Medalist Rating, demonstrating their potential to deliver positive alpha relative to the category median in aggregate. The team has undergone a bout of turnover recently, with Donald Butler leaving within the last two months. Even though it is a passive fund, high turnover can still hinder the effectiveness of the investment process. 

 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.

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.

High

Parent

Vanguard S&P Small-Cap 600 Value ETF

The Fund seeks to track the performance of a benchmark index that measures the investment return of small-capitalization value stocks in the United States.

The fund tracks a market cap-weighted index of small-cap value companies selected from the S&P 600.

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

Should Vanguard S&P Small-Cap 600 Value ETF (VIOV) Be on Your Investing Radar?

Vanguard S&P Mid-Cap 400 Growth ETF

Vanguard S&P Mid-Cap 400 ETF

Vanguard S&P Mid-Cap 400 Value ETF

Vanguard Small-Cap Growth

Vanguard Small Cap Value ETF

Vanguard U.S. Multifactor ETF

Vanguard U.S. Momentum Factor ETF

Vanguard U.S. Quality Factor ETF

Vanguard U.S. Value Factor ETF

Vanguard S&P Small-Cap 600 Growth ETF

Vanguard Mid-Cap ETF

Vanguard Mid-Cap Value ETF

Vanguard S&P 500 ETF

Vanguard Mid-Cap Growth ETF

Vanguard FTSE All-World ex-US Small-Cap ETF

Vanguard Total Stock Market ETF

Vgd Rsl2000 Grw Shs

Vanguard Russell 2000 ETF

Vanguard Russell 2000 Value ETF

Vanguard Extended Market ETF

With so many small and mid-cap ETFs out there, which might be the best to own right now. I'll restrict this analysis to Vanguard ETFs which seem to have a reasonable exchange policy and which offers among the best returns over the long term. My top choices are based on which Vanguard ETF have shown the best returns over the last five years, with the admonition that past returns may not predict the future.

Vanguard Has 17 Small And Mid-Cap ETFs. Which Are Best Right Now?

Vanguard S&P SmallCap 600 Value ETF combines two factors of the Fama-French model: value and size. It is well-diversified across holdings, but overweight in the financial sector. VIOV is very close to the S&P SmallCap 600 regarding performance since 2000: it has failed to bring excess return over its parent index.

VIOV: Value Indexes Are Lagging In Small Caps Too

 Invesco S&P SmallCap Consumer Discretionary ETF

SPDR S&P Oil & Gas Equipment & Services ETF

SPDR S&P Semiconductor ETF

SPDR S&P Transportation ETF

We have highlighted five ETFs from different zones that have plunged the most in the couple of weeks but have a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy).

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JPMorgan BetaBuilders U.S. Small Cap Equity ETF

iShares Nasdaq Biotechnology ETF

Invesco Nasdaq Biotechnology ETF

WisdomTree Cloud Computing Fund

SPDR S&P Retail ETF

Wall Street witnessed an upbeat December due to moderation in inflationary pressures, the likelihood of Fed rate cuts in 2024 and decent corporate earnings.

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VIOV tracks the S&P Small Cap 600 Value Index and currently holds 450+ stocks selected based on the ratios of book value, earnings, and sales to price. Fees are 0.15%. Though better than ETFs tracking the Russell 2000 Value Index, VIOV has a profitability problem. Negative earnings are expected for about 16% of the portfolio. Seeking Alpha Factor Grades also highlight this problem. I calculated a 5.59/10 profit score for VIOV, while multi-factor funds like XSVM and DFAT score better and have superior track records.

Less Money, More Problems: Why VIOV Is A Pass

Avantis U.S. Small Cap Value ETF

Dimensional US Small Cap Value ETF

Every week I am asked about Vanguard and its funds. So in this article I'll tackle six frequent questions, starting with the most popular.

Are Vanguard ETFs really the best deal?

Vanguard S&P Small-Cap 600 Value ETF holds over 400 small caps selected and weighted with value and growth metrics. It is well-diversified across sectors and holdings. It has failed to bring excess return over its parent index in the long term.

VIOV: Not The Best ETF To Bet On Value

VIOV invests in a diversified portfolio of U.S. small-cap stocks that are trading with "value" characteristics. While "value" in this case is really, in my opinion, a misnomer, VIOV's focus on cheaper stocks does make the fund attractive in this environment.

VIOV: Small-Cap Value Stocks Are Cheap

SPDR Bloomberg 1-3 Month T-Bill ETF

iShares 0-3 Month Treasury Bond ETF

SPDR S&P 500 ETF Trust

WisdomTree Bloomberg Floating Rate Treasury Fund

ProShares Ultra VIX Short-Term Futures ETF

Vanguard S&P Small-Cap 600 ETF

iPath S&P 500 VIX Short-Term Futures ETN Class A

Another week on the books, and though the data may not have picked up all the recent banking-related uncertainty, equity ETFs were hovering around a potent milestone over the last week at about $5 trillion in total AUM.

Weekly Asset Flows: Equities at $5 Trillion, Treasuries Up

iShares S&P 500 Growth ETF

iShares Russell 1000 Growth ETF

Vanguard S&P 500 Growth ETF

Vanguard Growth ETF

The rebalancing resulted in the growth indexes being overweight in energy and health care.

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Plus, iShares added an emerging market bond ETF to its lineup at the end of the week.

Odds & Ends: 6 Vanguard ETFs to See Share Splits

VALLEY FORGE, Pa. , Feb. 22, 2023 /PRNewswire/ -- Vanguard today announced plans to execute forward share splits for six equity ETFs.

Vanguard Announces Share Splits for Six Equity ETFs

First Trust NASDAQ Cybersecurity ETF

Vanguard FTSE All-World ex-US Index Fund

Vanguard High Dividend Yield ETF

February month is not famous for good stock returns.

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Small-cap value ETF VIOV hit a 52-week high. Can it soar higher?

Small-Cap Value ETF (VIOV) Hits New 52-Week High

VanEck Vectors Semiconductor ETF

Invesco S&P 500 Enhanced Value ETF

Industrial Select Sector SPDR Fund

As expected, the Federal Reserve on Wednesday hiked its benchmark interest rate by 25 bps.

Fed Hike Slows Down But Set to Remain Steady: ETFs to Gain

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

VIOV holds a value-oriented portfolio in the S&P SmallCap 600 Value Index. Financials and industrials represent 39% of asset value.

VIOV: An Average Small Cap Value ETF

iShares U.S. Insurance ETF

iShares U.S. Oil Equipment & Services ETF

iShares North American Tech-Multimedia Networking ETF

Investors are betting that traditional stocks like banks will lead the next bull market. Notably, energy and industrials were the biggest winners in October.

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Invesco S&P SmallCap 600 Pure Value ETF

The Vanguard S&P Small-Cap 600 Value ETF (VIOV) invests based on the S&P SmallCap 600 Value Index. The Invesco S&P SmallCap 600 Pure Value ETF (RZV) invests based on the S&P SmallCap 600 Pure Value Index.

VIOV Vs. RZV: Getting Too Fancy In The Small-Cap Value Space

VIOV is a small-cap value ETF equivalent to IJR and SLYV. Its heaviest sectors are financials and industrials.

VIOV: An ETF With Little Added Value

Vanguard Health Care ETF

Vanguard ETFs are typically low costs funds from a wide range of industries. Here're 3 Vanguard ETFs to buy in long-term portfolios in Q2: VUG, VHT, and VIOV.

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SPDR S&P 600 Small Cap ETF

History suggests that small-cap stocks have shown better success during inflationary periods.

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iShares S&P Mid-Cap 400 Value ETF

iShares S&P Mid-Cap 400 Growth ETF

iShares S&P Small-Cap 600 Value ETF

iShares S&P Small-Cap 600 Growth ETF

iShares S&P 500 Value ETF

Vanguard S&P 500 Value ETF

The style-box updates feature the iShares ETFs since for the mid-quarter updates, the performance data on the benchmarks is not available until the end of every month, and then reported after a day or two delay. In 2021, mid and small-cap value finally beat their growth brethren, but in large-cap, growth continues to be the king.

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First Trust Natural Gas ETF

Vanguard Financials ETF

SPDR S&P Homebuilders ETF

After enjoying a huge rally for most of the year, Wall Street was caught in wild trading in the recent weeks.

News for Vanguard S&P Small-Cap 600 Value ETF ETF (VIOV)