ETFs
Should the Vanguard Large-Cap ETF (VV) be on your investment radar?
Looking for broad exposure to the Large Cap Blend segment of the U.S. equity market? You should consider the Vanguard Large-Cap ETF (VV), a passively managed exchange-traded fund launched on 01/27/2004.
The fund is sponsored by Vanguard. It has accumulated assets of over $36.48 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the U.S. stock market.
Why a mix of large caps?
Companies that fall into the large-cap category typically have a market capitalization of more than $10 billion. Overall, they are generally a stable option, with less risk and more secure cash flows than mid- and small-cap companies.
Typically holding a combination of growth and value stocks, blended ETFs also exhibit qualities seen in both value and growth investments.
Costs
Since cheaper funds tend to perform better than more expensive funds, assuming all other factors remain equal, it’s important for investors to pay attention to an ETF’s expense ratio.
The annual operating expenses of this ETF are 0.04%, making it one of the cheapest products in the sector.
Its 12-month rolling dividend yield is 1.31%.
Sector exposure and main holdings
ETFs offer diversified exposure and thus minimize the risk associated with any one security, but it is always important to examine a fund’s assets in detail before investing. Most ETFs are very transparent products and many disclose their assets on a daily basis.
This ETF is primarily dedicated to the information technology sector, which represents approximately 29.10% of the portfolio. The financial and healthcare sectors round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT) accounts for about 6.78% of total assets, followed by Apple Inc (AAPL) and Nvidia Corp (NVDA).
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 represent the most investable 85% of market capitalization and are listed on the NYSE, NYSE Market, NASDAQ or ARCA.
The ETF has gained about 16.82% year-to-date and is up about 26.28% over the past year (as of 05/07/2024). Over the past 52 weeks, it has traded between $188 and $253.15.
The ETF has a beta of 1.01 and a standard deviation of 17.49% over the trailing three-year period, making it a medium-risk pick in this sector. With around 513 stocks, it effectively diversifies company-specific risk.
Alternatives
Vanguard Large-Cap ETF is rated 3 (Hold) by Zacks ETF, which is based on the asset class’s expected return, expense ratio and momentum, among other factors. Thus, VV is a sufficient option for those seeking exposure to the Style Box – Large Cap Blend market sector. Investors may also want to consider other ETF options in this area.
The story continues
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While the iShares Core S&P 500 ETF has $499.53 billion in assets, the SPDR S&P 500 ETF has $553.57 billion. The IVV has an expense ratio of 0.03% and the SPY charges 0.09%.
Conclusion
Individual and institutional investors are increasingly turning to passively managed ETFs because they offer low costs, transparency, flexibility and tax efficiency; these types of funds are also excellent vehicles for long-term investors.
To learn more about this and other ETFs, find products that match your investment goals, and read articles on the latest developments in the ETF investment universe, visit Zacks ETF Center.
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Vanguard Large-Cap ETF (VV): ETF Research Reports
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports