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Should Vanguard LargeCap ETF (VV) Be on Your Investing Radar?

Launched on 01/27/2004, the Vanguard LargeCap ETF (VV) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.

The fund is sponsored by Vanguard. It has amassed assets over $25.91 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Large cap companies typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.

Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.

Costs

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.

Annual operating expenses for this ETF are 0.04%, 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

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector--about 30% of the portfolio. Healthcare and Consumer Discretionary round out the top three.

Looking at individual holdings, Apple Inc. (AAPL) accounts for about 5.78% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN).

Performance and Risk

VV seeks to match the performance of the CRSP US Large Cap Index before fees and expenses. The CRSP US Large Cap Index includes U.S. companies that comprise the top 85% of investable market capitalization and are traded on NYSE, NYSE Market, NASDAQ or ARCA.

The ETF has lost about -8.41% so far this year and it's up approximately 14.13% in the last one year (as of 01/25/2022). In the past 52-week period, it has traded between $174.25 and $221.75.

The ETF has a beta of 1.01 and standard deviation of 22.38% for the trailing three-year period, making it a medium risk choice in the space. With about 601 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard LargeCap ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VV is an excellent option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.

The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $307.89 billion in assets, SPDR S&P 500 ETF has $413.48 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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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Vanguard LargeCap ETF (VV): ETF Research Reports
 
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
 
Apple Inc. (AAPL): Free Stock Analysis Report
 
Microsoft Corporation (MSFT): Free Stock Analysis Report
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
iShares Core S&P 500 ETF (IVV): ETF Research Reports
 
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