A sound investment process and strong management team underpin Vanguard S&P Mid-Cap 400 Value ETF's Morningstar Medalist Rating of Silver. The portfolio maintains a sizable cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy merits an Above Average Process Pillar rating. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm a High Parent Pillar rating. People, Process and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Fidelity National Financial

Reinsurance Group of America

W. P. Carey

Tenet Healthcare

US Foods Holding

Regal Rexnord Corp

Performance Food Group

Ally Financial

Chesapeake Energy

BJ`s Wholesale Club Holdings Inc

The S&P MidCap 400 Value Index assigns a growth and value score to each stock in the S&P MidCap 400 Index. Those in the cheapest third are allocated to the Value Index, while the fastest growing third are swept into the S&P MidCap 400 Growth Index. The middle third is split between the two indexes based on their style traits until the market cap for each amounts to approximately half of the S&P MidCap 400 Index. This approach admits some blend and growth names into the value index, improving its breadth across the value-growth spectrum. Nearly one third of its portfolio overlaps with iShares S&P Mid-Cap 400 Growth ETF IJK.

S&P requires all new entrants to be profitable at time of admittance, though each holding may not currently be profitable. This constraint should reduce the number of struggling companies in the portfolio—companies that tend to perform especially poorly during periods of market stress—and help contain some of the extra volatility introduced by focusing on the smaller end of the mid-cap market segment. 

The portfolio features smaller companies than most peers in the mid-cap value category. The fund's average market cap of $5.9 billion measured less than half the category average as of December 2023. Omitting the largest 500 profitable stocks in the U.S. market creates a relatively tight eligibility window for companies to enter the portfolio. As of July 2023, eligible stocks had a market cap of between $5.2 billion and $14.5 billion. These constraints contribute to relatively high turnover. Its 35% 10-year average was below the category average but above index-tracking peers, many of which can hold larger companies. High turnover raises transaction costs that can erode returns.

The fund's broad reach minimizes stock-specific risk. The portfolio usually holds around 300 stocks, and it concentrates only 9% of its assets across its top 10 holdings. No one position accounts for more than 1.5% of the allocation, further distributing risk across the portfolio.

Sound diversification and a profitability bias should prevent any nasty surprises, but differences between this portfolio and its average peer could cause performance discrepancies from time to time. The fund tends to hold larger stakes in financial, real estate, and consumer cyclical stocks than peers. These differences stem from omitting larger companies common to competitor portfolios, allocating instead to sectors that have more stocks within the index's market-cap bounds. For example, the fund does not hold industrial manufacturer Paccar, which is the second-largest holding in the mid-cap value category peer Vanguard Mid-Cap Value ETF. Differences like these lead to varying short-term performance patterns depending on the relative performance of each stock and sector.

The portfolio remains a good representation of the mid-cap value category despite these differences. Most key value metrics are closely tied to the category average. Price/book, price/earnings, and price/sales ratios have all moved in lockstep with those of the fund's average peer since the fund's inception in 2000. Approximating the category average in this way should help this fund turn its low fee into a distinct performance advantage.

Note: The Process Pillar rating and analysis are indirectly assigned by an analyst. When an analyst covers a passively managed vehicle that tracks a particular index, Morningstar associates the Process Pillar rating assigned to that vehicle with the index concerned. Morningstar then maps the Process Pillar associated with a given index to any other uncovered passive strategies that track the same index. This ensures that the analyst’s view is leveraged whenever available and promotes consistency when analyzing passive vehicles associated with a given index.

Above Average

Process

Vanguard’s equity team is strong compared with others in the industry, resulting in an Above Average People Pillar rating. There are two managers listed on the fund: Kenny Narzikul, Awais Khan. The team is largely unproven, as its members only average four years of portfolio management experience. Together, they manage a total of three strategies, with a Gold asset-weighted algorithmically-assigned average Morningstar Medalist Rating, demonstrating their potential to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

People

As The Vanguard Group settles on new senior leadership, it retains a High Parent rating.

Vanguard announced current CEO Tim Buckley will step down by the end of the year, marking an end to his 33 years at the firm. Historically, Vanguard has pronounced CEO retirements while simultaneously signaling who (from inside the firm) would take over. In this instance, Vanguard’s board said it will evaluate internal and external candidates in the coming months to find its next, and fifth, leader, though it also promoted CIO Greg Davis to president.

Vanguard flourished in several respects under Buckley’s leadership. Assets under management have grown by two thirds over his six years at the helm, while its asset-weighted average US fund fee ratcheted lower to 0.08% at the end of 2023. Vanguard further refined its advice business through its low-cost Digital Advisor platform and more holistic Vanguard Personal Advisor Services, and it debuted promising investment options.

Vanguard has had its share of challenges under Buckley, too. Growing its business outside the US has proved difficult, and ex US investors account for less than 10% of AUM. Between 2019 and 2023, Vanguard’s efforts to build its China business underwent dramatic shifts, with the firm ultimately abandoning plans to launch low-cost index funds there. It also ended a partnership with Ant Financial to provide advisory services to retail investors. Inside the US, customer service issues have continued to be a problem, and some of Vanguard’s newer offers, such as margin loans, seem a departure from a more-conservative approach to investing.

Vanguard retains an investor-friendly culture at its core that’s burnished by a commitment to low costs and supported by its unique mutual ownership structure and direct-to-investor playbook.

High

Parent

Vanguard S&P Mid-Cap 400 Value ETF

IVOV tracks an index of value-style securities from the Committee-selected S&P mid-cap 400.

Looking for broad exposure to the Mid Cap Value segment of the US equity market? You should consider the Vanguard S&P Mid-Cap 400 Value ETF (IVOV), a passively managed exchange traded fund launched on 09/09/2010.

Should Vanguard S&P Mid-Cap 400 Value ETF (IVOV) Be on Your Investing Radar?

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Vanguard S&P Mid-Cap 400 ETF

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Vanguard U.S. Multifactor ETF

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Vanguard S&P Small-Cap 600 Growth ETF

Vanguard S&P Small-Cap 600 Value ETF

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Vanguard Mid-Cap Value ETF

Vanguard S&P 500 ETF

Vanguard Mid-Cap Growth ETF

Vanguard FTSE All-World ex-US Small-Cap ETF

Vanguard Total Stock Market ETF

Vanguard Russell 2000 Growth 

Vanguard Russell 2000 ETF

Vanguard Russell 2000 Value ETF

Vanguard Extended Market ETF

With so many small and mid-cap ETFs out there, which might be the best to own right now. I'll restrict this analysis to Vanguard ETFs which seem to have a reasonable exchange policy and which offers among the best returns over the long term. My top choices are based on which Vanguard ETF have shown the best returns over the last five years, with the admonition that past returns may not predict the future.

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ARK Innovation ETF

Avantis U.S. Small Cap Value ETF

iShares Core S&P 500 ETF

iShares S&P 500 Growth ETF

iShares Micro-Cap ETF

iShares Russell 2000 ETF

iShares Russell 2000 Value ETF

iShares Russell 2000 Growth ETF

iShares Russell Mid-Cap Growth ETF

iShares Russell Midcap ETF

iShares Russell Mid-Cap Value ETF

iShares Dow Jones U.S. ETF

Invesco QQQ

Invesco S&P 500 Low Volatility ETF

SPDR Portfolio Mid Cap ETF

Invesco S&P 500 Momentum ETF

Invesco S&P 500 Minimum Variance ETF

SPDR Portfolio Small Cap ETF

SP Funds S&P 500 Sharia Industry Exclusions ETF

Direxion Daily S&P 500 Bull 2x Shares

Invesco S&P 500 Value with Momentum ETF

Invesco S&P 500 Enhanced Value ETF

The Federal Reserve kept rates steady and maintained a hawkish stance toward inflation while acknowledging an outstanding economy and progress in vanquishing inflationary pressure. Expectations for rate cuts in March were dampened by a change in statement language and Powell's comments in the press conference.

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Vanguard S&P Mid-Cap 400 Value ETF implements a systematic strategy based on value and growth ratios. It is well-diversified across sectors and holdings. The underlying index has outperformed the S&P Mid-Cap 400 benchmark since 2000.

IVOV: A Well-Diversified Value ETF For Long-Term Investors

iShares S&P Mid-Cap 400 Value ETF

SPDR S&P 400 Mid Cap Value ETF

Motley Fool Small-Cap Growth ETF

Invesco S&P MidCap Quality ETF

While many Wall Street analysts were expecting a soft landing in the U.S. economy hurt by high inflation and rates, the latest view is that "rolling recession" is turning into "rolling expansion," per a top Wall Street economist, as quoted on MarketWatch.

Time for Mid-Cap Value ETFs to Capitalize on "Rolling Expansion"?

IVOV tracks the S&P Mid-Cap 400 Value Index. Valuation metrics are not much cheaper than in the parent index S&P 400.

IVOV: A Mid-Cap Value ETF By Vanguard

Vanguard S&P Small-Cap 600 ETF

Plus, iShares added an emerging market bond ETF to its lineup at the end of the week.

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VALLEY FORGE, Pa. , Feb. 22, 2023 /PRNewswire/ -- Vanguard today announced plans to execute forward share splits for six equity ETFs.

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This mid-cap ETF hits a new 52-week high. Are more gains in store for this ETF?

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

iShares S&P Mid-Cap 400 Growth ETF

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iShares S&P Small-Cap 600 Growth ETF

iShares S&P 500 Value ETF

Vanguard S&P 500 Growth ETF

Vanguard S&P 500 Value ETF

The style-box updates feature the iShares ETFs since for the mid-quarter updates, the performance data on the benchmarks is not available until the end of every month, and then reported after a day or two delay. In 2021, mid and small-cap value finally beat their growth brethren, but in large-cap, growth continues to be the king.

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Invesco S&P MidCap Momentum ETF

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Investors seeking to capitalize on the improving economic conditions but worried about the resurgence in the pandemic should consider mid-cap stocks in the basket form.

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AECOM

American Financial Group

East West Bancorp

First Horizon National

Jones Lang LaSalle

Kohl's

Lear

SPDR S&P Midcap 400 ETF Trust

Owens Corning

Omega Healthcare Investors

Reliance Steel & Aluminum

Reinsurnce Gr Amer Debentures 2016-15.06.56 Fixed/Floating Rate

Signature Bank

Steel Dynamics

Alleghany

IVOV strategy and facts. Comparing IVOV with my value model.

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iShares Russell 1000 Value ETF

iShares Russell 1000 Growth ETF

We highlight several reasons for outperformance of value investing, which refers to those stocks that trade below their intrinsic value.

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While large companies are normally known for stability and the smaller ones for growth, mid-caps offer the best of both worlds, simultaneously allowing growth and stability in a portfolio.

News for Vanguard S&P Mid-Cap 400 Value ETF ETF (IVOV)