Diversify into Mid-Size Companies

Vanguard’s ETF for Mid-Cap Growth and Value Investments

There is certainly something to be said for investing in dividend-growth stocks. But sometimes the name of a fund doesn’t help you know if it is a growth, value, blend, or dividend-focused fund. This is certainly true of VO – Vanguard Mid Cap ETF (Ticker VO.)

Fund Profile is Growth and Value

Vanguard Mid-Cap ETF invests in public equity markets of the United States. The focus is stocks of companies operating across diversified sectors including growth and value stocks of mid-cap companies. The fund seeks to track the performance of the MSCI US Mid Cap 450 Index, Spliced Mid Cap Index and CRSP US Mid Cap Index, by using full replication technique. Vanguard Index Funds – Vanguard Mid-Cap ETF was formed on May 21, 1998.

What Should You Evaluate?

There are a couple of basics you should research when considering an ETF. One thing I do is to compare an ETF I am considering with funds I already know. Therefore, I compare VO with VYM. I also want to know what the peers for a fund are. In the case of VO, a good peer for comparison is Schwab’s SCHM. When I do the comparison, I am looking for growth in the value of the investment (performance), dividend growth and history, and certainly the cost of the fund.  The following screens help tell the story. I added highlighting, arrows and comments.

I always want to see if dividends are a positive factor. For VYM and VO they are.
Is the “Dividend Growth” value accurate? I don’t think so. See the next image.
This seems to be a better view of dividend growth from Seeking Alpha.

Which Would I Choose?

If I have to pick between VO and SCHM, I find VO more appealing. Of course, “past history doesn’t guarantee future results.” But either one would be a good addition to a portfolio that includes investments like SCHD and VYM.

Comparison Shopping for Momentum (Price performance) and Dividends.

Full Disclosure

Cindie and I own more than 1,500 shares of ETF VYM.