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Should Vanguard S&P MidCap 400 Growth ETF (IVOG) Be on Your Investing Radar?

Designed to provide broad exposure to the Mid Cap Growth segment of the US equity market, the Vanguard S&P MidCap 400 Growth ETF (IVOG) is a passively managed exchange traded fund launched on 09/09/2010.

The fund is sponsored by Vanguard. It has amassed assets over $698.20 million, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.

Why Mid Cap Growth

Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. Thus they have a nice balance of growth potential and stability.

Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Also, growth stocks are a type of equity that carries more risk compared to others. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 0.59%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Industrials sector--about 18.10% of the portfolio. Information Technology and Consumer Discretionary round out the top three.

Looking at individual holdings, Targa Resources Corp. (TRGP) accounts for about 1.60% of total assets, followed by Steel Dynamics Inc. (STLD) and Carlisle Cos. Inc. (CSL).

The top 10 holdings account for about 12.16% of total assets under management.

Performance and Risk

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

The ETF has lost about -19.83% so far this year and is down about -14.85% in the last one year (as of 07/27/2022). In the past 52-week period, it has traded between $153.70 and $218.51.

The ETF has a beta of 1.09 and standard deviation of 26.77% for the trailing three-year period, making it a medium risk choice in the space. With about 235 holdings, it effectively diversifies company-specific risk.

Alternatives

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

The Vanguard MidCap Growth ETF (VOT) and the iShares Russell MidCap Growth ETF (IWP) track a similar index. While Vanguard MidCap Growth ETF has $9.30 billion in assets, iShares Russell MidCap Growth ETF has $11.66 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.

Bottom-Line

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

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 MidCap 400 Growth ETF (IVOG): ETF Research Reports
 
Steel Dynamics, Inc. (STLD): Free Stock Analysis Report
 
Carlisle Companies Incorporated (CSL): Free Stock Analysis Report
 
Targa Resources, Inc. (TRGP): Free Stock Analysis Report
 
iShares Russell MidCap Growth ETF (IWP): ETF Research Reports
 
Vanguard MidCap Growth ETF (VOT): ETF Research Reports
 
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