The Vanguard Small-Cap Value ETF (VBR) offers a low-cost option for investors seeking small-cap value exposure.
City: The Vanguard Small-Cap Value ETF, or VBR, launched back in 2004. It’s designed to give you broad access to small-cap value stocks in the U.S. market.
Sponsored by Vanguard, this ETF has gathered over $30.84 billion in assets, making it the biggest player in the small-cap value space.
Investing in small-cap companies can be exciting, but remember, they come with risks. These companies usually have market caps under $2 billion, which can lead to higher volatility.
Value stocks, like those in this ETF, often have lower price-to-earnings ratios. They might not grow as fast as growth stocks, but historically, they’ve done well over the long haul.
When picking an ETF, costs matter. VBR has low annual operating expenses of just 0.07%, which is a big plus for investors.
It also offers a 12-month trailing dividend yield of 1.99%, which is decent for those looking for income.
Even though ETFs spread out risk, it’s smart to check what’s inside. VBR has a big chunk in Financials, around 21.70%, with Industrials and Consumer Discretionary following closely.
Some of its top holdings include Smurfit Westrock Plc and First Citizens Bancshares, which make up a small percentage of the total assets.
VBR aims to match the performance of the CRSP U.S. Small Cap Value Index. So far this year, it’s down about -0.65%, but it’s up around 14.36% over the last year.
With a beta of 1.15, it’s considered a medium-risk option. Plus, with around 840 holdings, it helps reduce the risk tied to any single company.
VBR has a Zacks ETF Rank of 2, which means it’s a solid buy. If you’re looking for small-cap value exposure, it’s a great choice.
There are other options too, like the iShares Russell 2000 Value ETF and the Avantis U.S. Small Cap Value ETF, which track similar indexes but have slightly higher expense ratios.
In the end, VBR is a great pick for long-term investors. Its low costs and transparency make it popular among both retail and institutional investors.
If you want to dive deeper into ETFs, check out Zacks ETF Center for more info and updates.
