Vanguard Mid-Cap Growth Index provides a market-cap-weighted portfolio of the highest-growth companies in the mid-cap market. Its broad diversification and razor-thin expense ratio make it a compelling option. 

The fund tracks the CRSP US Mid Cap Growth Index, which captures the faster-growing side of the mid-cap market. Investor sentiment around their superior growth prospects tends to drive the high valuations of these stocks. These valuations represent the market’s consensus opinion, but they may not always be justified, making this a relatively volatile market segment. While mid-cap stocks constitute most of the fund, larger stocks are also present, which should help temper volatility.

Market-cap-weighting is an efficient way to allocate the portfolio because it harnesses the market's consensus opinion on the relative value of each stock. Stocks that grow in size take up a larger share of the portfolio, while smaller companies that may be struggling will take on a less important role. Generous buffers around the fund’s size and style constraints improve the breadth of the portfolio and help tame turnover.

The portfolio’s sector complexion largely resembles the category with a handful of differences. Like most peers, technology stocks take center stage, but they receive even more attention here. The portfolio allocates more than 30% to the sector versus the typical peer’s 26%. Real estate stocks also receive a higher weighting (7%) than the norm (3%); an unexpected difference given these stocks tend to fall closer to the value side of the Morningstar Style Box. Welltower, a healthcare facilities REIT, is one of the fund’s largest holdings. To offset these overweight sector positions, the fund underweights financials, healthcare, and cyclical stocks.

Buffer rules around the fund’s size constraints coupled with market-cap weighting allow it to capitalize on strong performance in its largest stocks. Index fund peers without these rules may be forced to sell the stocks sooner, realizing less of their gain. Generous buffer rules let them grow with fewer restrictions, and market-cap weighting gives them greater prominence. 

Larger stocks like Arista Networks, Fortinet, and Cintas contributed greatly to the fund’s long-term outperformance. The fund outpaced its average peer by 87 basis points annualized since it started following its current benchmark in April 2013 through December 2023.

Analyst Rating

A potent mid-cap growth index fund.

Analyst

Zachary Evens

Amphenol

TransDigm

Constellation Energy Corp

Cintas

Motorola Solutions

DexCom

Welltower

Copart

Super Micro Computer

Coinbase

The strategy effectively delivers exposure to mid-cap growth stocks. It captures the more expensive half of the market in a cost-effective way and diversifies away most stock-specific risk with its broad reach. It earns an Above Average Process Pillar rating.

Above Average

Process

The Vanguard equity index group boasts seasoned managers and a dedicated supporting staff. It’s well-equipped to provide tight index tracking, earning it an Above Average People rating.

Awais Khan, Aurelie Denis, and Aaron Choi comanage this strategy. All are relatively recent joiners to the fund, but they have all been at Vanguard for at least seven years. Khan is the longest-tenured manager, having joined the fund in 2021, while both Denis and Choi joined the roster in 2023. Denis and Choi were added to the fund in advance of Donald Butler’s December 2023 retirement. Butler served his entire career at Vanguard, joining the firm in 1996. He managed this fund since 2013. Vanguard frequently rotates its managers to promote breadth and depth across the team; we do not expect the manager change to disrupt the strategy in any way.

The managers are responsible for the fund's trading, providing more portfolio insights than a stand-alone trader. They are supported by a global team of dedicated personnel and sophisticated, scalable technology that improve tracking precision and reduce the managers' workload. Vanguard's independent risk-management team works closely with the managers to monitor trades and review any potential issues. Managers' compensation is tied to performance using a combination of tracking error and excess return metrics, which aligns their interests with investors'.

People

As The Vanguard Group settles on new senior leadership, it retains a High Parent rating.

Vanguard announced current CEO Tim Buckley will step down by the end of the year, marking an end to his 33 years at the firm. Historically, Vanguard has pronounced CEO retirements while simultaneously signaling who (from inside the firm) would take over. In this instance, Vanguard’s board said it will evaluate internal and external candidates in the coming months to find its next, and fifth, leader, though it also promoted CIO Greg Davis to president.

Vanguard flourished in several respects under Buckley’s leadership. Assets under management have grown by two thirds over his six years at the helm, while its asset-weighted average US fund fee ratcheted lower to 0.08% at the end of 2023. Vanguard further refined its advice business through its low-cost Digital Advisor platform and more holistic Vanguard Personal Advisor Services, and it debuted promising investment options.

Vanguard has had its share of challenges under Buckley, too. Growing its business outside the US has proved difficult, and ex US investors account for less than 10% of AUM. Between 2019 and 2023, Vanguard’s efforts to build its China business underwent dramatic shifts, with the firm ultimately abandoning plans to launch low-cost index funds there. It also ended a partnership with Ant Financial to provide advisory services to retail investors. Inside the US, customer service issues have continued to be a problem, and some of Vanguard’s newer offers, such as margin loans, seem a departure from a more-conservative approach to investing.

Vanguard retains an investor-friendly culture at its core that’s burnished by a commitment to low costs and supported by its unique mutual ownership structure and direct-to-investor playbook.

High

Parent

Vanguard Mid-Cap Growth ETF

VOT tracks a market cap-weighted index of mid-cap growth companies selected by the Center for Research in Security Prices (CRSP).

The fund tracks an index of mid-cap stocks in the US. Holdings are selected and weighed based on growth factors.

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.

Should Vanguard Mid-Cap Growth ETF (VOT) Be on Your Investing Radar?

iShares Morningstar Mid-Cap Growth ETF uses historical and forecasted fundamental growth metrics to select mid-size companies. The portfolio is quite heavy in industrials and technology, but well-diversified across holdings. IMCG has superior growth and quality metrics compared to the benchmark and has outperformed other mid-cap growth ETFs since 2016.

IMCG: Mid-Cap Growth ETF Beating Competitors

Vanguard Mid-Cap Growth Index Fund ETF tracks the CRSP US Mid Cap Growth Index and has 150 holdings. The portfolio is heavy in technology, but it is well-diversified across sectors and holdings. The fund's quality metrics and total return are superior to a mid-cap benchmark, but another mid-cap growth ETF looks more attractive.

VOT: A Well-Diversified Growth ETF, But Not The Best Among Peers

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Vanguard S&P Mid-Cap 400 ETF

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Vanguard Small Cap Value ETF

Vanguard U.S. Multifactor ETF

Vanguard U.S. Momentum Factor ETF

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Vanguard U.S. Value Factor ETF

Vanguard S&P Small-Cap 600 Growth ETF

Vanguard S&P Small-Cap 600 Value ETF

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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 Mid-Cap 400 Growth Index Fund ETF Shares uses sales growth, earnings growth, and momentum to select stocks in the S&P Mid-Cap 400 Index. The VOG ETF overweights industrials and underweights financials compared to the parent index. Not only growth ratios, but also quality metrics are superior to the benchmark.

IVOG: Mid-Cap Growth ETF Outperforming Peers In 2024

Vanguard U.S. Minimum Volatility ETF

Most investors have never heard of so-called "factor funds" but four of five such Vanguard factor funds have outperformed Vanguard ETFs of similar composition. Factor funds focus on portfolios that have stocks with past characteristics such as momentum, quality, and low volatility. Outperformance has been consistent since inception, except for a fund with a focus on low volatility.

You'd Be Surprised Which Four Vanguard ETFs Have Consistently Beaten Their Category Averages

Mid-cap growth has underperformed large-caps, but mean reversion may lead to a rotation into mid-cap growth. The Vanguard Mid-Cap Growth ETF is a good fund to consider, with low expenses and a diverse portfolio. VOT compares favorably to other ETFs in the mid-cap growth segment, making it a solid contender for investment.

VOT: A Laggard That Can Relatively Outperform Large-Caps

Vanguard Mid-Cap Growth ETF is an exchange traded fund that invests in growth stocks of mid-cap companies across sectors. The fund has a low expense ratio of 0.07% and has consistently delivered high average total returns. While the fund generates low yield, it is well-diversified and possesses characteristics of large-cap funds, making it a good choice for long-term growth-seeking investors.

VOT: Portfolio Of Mid-Cap Stocks Delivering Quite High Returns Over The Long Run

Investors should think twice before picking an actively managed mutual fund according to its style category. By “style category,” I'm referring to the widely used method of grouping mutual funds according to the market-cap of the stocks they invest in and where those stocks stand on the spectrum of growth-to-value.

You can invest in market winners and still lose big. Here's how to avoid the hit.

Vanguard Value ETF

Over time you won't beat the market indexes, while you'll drive up trading and tax costs, it says. Hire a mutual-fund manager to pick stocks for you and you'll have to pay their hefty expenses as well.

Vanguard index funds lose out to its own stock picking fund

iShares Russell Mid-Cap Growth ETF

Nuveen ESG Large-Cap Growth ETF

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First Trust NASDAQ-100 Ex-Technology Sector Index Fund

The Fed has hiked rates by 25 bps yesterday and adopted a softer tone on the future moves. This may boost growth ETFs in the coming days.

Is it Time for Growth ETFs as Fed Softens Hawkish Tone?

VOT invests in U.S. mid-cap growth stocks. VOT has the potential to deliver long-term capital gains, but its valuation is still not attractive enough relative to its value peer.

VOT: Valuation Fair, But Still Not Attractive Enough

Should Vanguard MidCap Growth ETF (VOT) Be on Your Investing Radar?

Growth has underperformed YTD as sky-high growth valuations come back down to earth. Losses have been severe enough that some growth segments are looking reasonably valued, even, perhaps, undervalued.

VOT: Simple Mid-Cap Growth ETF, Strong Growth Prospects, Reasonable Valuation

Research shows that the mid-cap space offers a superior risk-reward opportunity for investors as compared to the small- and large-cap sectors of the market. In addition, research also shows that the longer mid-caps are held, the more often they outperform.

VOT: Vanguard Explores The Middle Ground

The Vanguard Mid-Cap Growth ETF tracks a basket of mid- and large-cap stocks that score well on six growth factors. Fees are 0.07% and AUM is nearly $9B. This article centers on whether VOT hits the 'sweet spot' in terms of risk and return for growth investors. I evaluated it based on performance, volatility, growth, valuation, and profitability.

Vanguard Mid-Cap Growth ETF: Overvalued With Many Low Margin Holdings

ProShares Bitcoin Strategy ETF

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Invesco QQQ

Despite the carnage in the capital markets, those who wish to take the contrarian angle may do so with these best ETFs to buy at a discount. The post The 4 Best ETFs for Bargain Hunters to Buy Now appeared first on InvestorPlace.

The 4 Best ETFs for Bargain Hunters to Buy Now

Vanguard Health Care ETF

VHT and VOT saw massive trading volumes in yesterday trading session.

2 ETFs to Watch for Outsized Volume on Healthcare and Mid-Cap

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NuShares ESG Mid-Cap Growth ETF

Growth stocks have underperformed value stocks in 2022. Now might be the perfect time to buy one of these mid-cap growth funds.

10 Mid-Cap Growth Funds to Buy for Long-Term Gains

iShares Russell Mid-Cap Value ETF

SPDR S&P Midcap 400 ETF Trust

Schwab U.S. Mid-Cap ETF

Investors seeking to capitalize on the strong fundamentals but worried about uncertainty should consider mid-cap ETFs.

Mid-Cap ETFs Deserving Attention Amid Current Market Conditions

VOT's investment mandate is to track the CRSP US Mid Cap Growth Index. The principal issue with VOT is that despite its seemingly mid-cap focus, over 96% of its net assets are invested in 170 companies with market capitalizations above $10 billion.

VOT: Large-Cap High-Quality Mix With Overstretched Valuation

Here's Why Mid-Cap ETFs Are the Right Bets Now

Mid-Cap ETFs to Bet On Amid Growing Market Concerns

Investment research shows the mid-cap sector is the "sweet spot" of the market - yet many investors do not have adequate exposure to the category. With an expense ratio of only 0.07% and noting that the VOT ETF has outperformed the S&P500 over the past 10 years, it is an ideal choice for the well-diversified portfolio.

News for Vanguard Mid-Cap Growth ETF ETF (VOT)