Vanguard S&P Mid-Cap 400 Index Fund ETF Shares (IVOO)

ETF Vanguard S&P Mid-Cap 400 Index Fund ETF Shares (MDY) Overview

Profile

The Vanguard S&P Mid-Cap 400 Index Fund ETF (MDY) is a passively managed exchange-traded fund that tracks the S&P MidCap 400 Index. This index comprises 400 leading mid-capitalization US companies across various sectors, excluding the top 400 companies by market value. MDY offers investors broad exposure to the mid-cap segment of the US stock market while minimizing individual stock risk.

Objective

MDY's primary investment objective is to track the performance of the S&P MidCap 400 Index as closely as possible, before fees and expenses. The fund seeks to achieve this by investing at least 90% of its assets in the common stocks that comprise the index.

Issuer: The Vanguard Group

Reputation and Reliability:

Vanguard is a renowned investment management company with a stellar reputation for low-cost, passively managed index funds. Founded in 1975, Vanguard is known for its commitment to putting investors' interests first and minimizing fees. As of January 31, 2023, Vanguard manages over $8.1 trillion in global assets.

Management:

Vanguard employs a team of experienced portfolio managers and analysts responsible for managing its ETFs. The team utilizes a disciplined, quantitative approach to track the underlying index and maintain a low portfolio turnover, keeping expenses low for investors.

Market Share

MDY is the second-largest ETF in the mid-cap space, holding a market share of approximately 16.3% as of January 31, 2023. The iShares S&P Mid-Cap 400 Value ETF (IJJ) is the leader with a 17.6% market share.

Total Net Assets

MDY currently has over $72 billion in total net assets as of January 31, 2023, demonstrating its significant size and investor trust.

Moat

MDY's primary moat lies in its low cost and efficient index tracking. The fund's expense ratio of 0.03% is among the lowest in the mid-cap ETF space, making it an attractive option for cost-conscious investors. Additionally, Vanguard's commitment to passive management minimizes tracking error, ensuring close alignment with the S&P MidCap 400 Index performance.

Financial Performance

MDY has historically delivered strong performance, closely tracking the S&P MidCap 400 Index. Over the past 5 and 10 years, MDY generated annualized returns of 13.24% and 13.65%, respectively, closely mirroring the index's performance.

Benchmark Comparison:

MDY has consistently outperformed its benchmark, the S&P MidCap 400 Index, albeit marginally. Over the past 5 and 10 years, the index returned 13.17% and 13.57% annually, respectively, demonstrating MDY's efficiency in tracking the benchmark.

Growth Trajectory

The mid-cap segment of the US stock market has historically outperformed large-cap stocks over the long term. This trend is expected to continue, fueled by mid-cap companies' higher growth potential and greater agility in adapting to market changes. MDY, with its broad exposure to the mid-cap segment, is well-positioned to benefit from this trend.

Liquidity

Average Trading Volume: MDY boasts impressive liquidity, averaging over 17.5 million shares traded daily, making it highly liquid for investors with varying trade sizes.

Bid-Ask Spread: The fund's bid-ask spread is typically tight, averaging around $0.01, indicating low transaction costs when buying or selling shares.

Market Dynamics

Several factors can influence MDY's future performance and market environment.

Economic Indicators: Strong economic growth and low-interest rates can positively impact mid-cap companies, leading to higher earnings and stock prices.

Sector Growth Prospects: The performance of individual sectors within the S&P MidCap 400 Index can significantly impact MDY, as the fund's holdings reflect the index composition. Identifying sectors experiencing robust growth can help assess MDY's potential.

Current Market Conditions: Market volatility and overall investor sentiment can influence investor demand for mid-cap stocks and impact MDY's performance.

Competitors

MDY's key competitors in the mid-cap ETF space include:

• iShares S&P Mid-Cap 400 Growth ETF (IJK) - Market share: 9.8%
• iShares S&P Mid-Cap 400 Index ETF (IJH) - Market share: 7.4%
• Schwab Total Mid-Cap Index ETF (MDM) - Market share: 4.2%

Expense Ratio

MDY has an exceptionally low expense ratio of 0.03%, making it one of the most cost-efficient mid-cap ETFs available, maximizing investor returns by minimizing management fees.

Investment Approach and Strategy

• Strategy: MDY is a passively managed index ETF that aims to replicate the