Dj Illumina Inc. Stock Underperforms Tuesday When Compared To Competitors

If you're interested in broad exposure to the Mid Cap Value segment of the US equity market, look no further than the Vanguard S&P Mid-Cap 400 Value ETF (IVOV), a passively managed exchange traded fund launched on 09/09/2010.

The fund is sponsored by Vanguard. It has amassed assets over $993.97 million, making it one of the average sized ETFs attempting to match the Mid Cap Value segment of the US equity market.

Why Mid Cap Value

Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. These types of companies, then, have a good balance of stability and growth potential.

Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

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 1.29%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Financials sector--about 25.90% of the portfolio. Industrials and Consumer Discretionary round out the top three.

Looking at individual holdings, Illumina Inc (ILMN) accounts for about 1.52% of total assets, followed by Tenet Healthcare Corp (THC) and Fidelity National Financial Inc (FNF).

The top 10 holdings account for about 8.51% of total assets under management.

Performance and Risk

IVOV seeks to match the performance of the S&P MidCap 400 Value Index before fees and expenses. The S&P MidCap 400 Value Index measures the performance of value stocks of medium-size U.S. companies.

The ETF has added roughly 17.90% so far this year and was up about 37.35% in the last one year (as of 11/12/2024). In the past 52-week period, it has traded between $75.55 and $102.79.

The ETF has a beta of 1.15 and standard deviation of 19.90% for the trailing three-year period, making it a medium risk choice in the space. With about 297 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard S&P Mid-Cap 400 Value 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, IVOV is a reasonable option for those seeking exposure to the Style Box - Mid Cap Value area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Russell Mid-Cap Value ETF (IWS) and the Vanguard Mid-Cap Value ETF (VOE) track a similar index. While iShares Russell Mid-Cap Value ETF has $14.11 billion in assets, Vanguard Mid-Cap Value ETF has $18.57 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.

Bottom-Line

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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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