Vanguard Consumer Discretionary Index Fund ETF Shares (VCR)VCR

ETF Vanguard Consumer Discretionary Index Fund ETF Shares (VCR)

Profile:

Vanguard Consumer Discretionary Index Fund ETF Shares (VCR) is an exchange-traded fund that tracks the performance of the Consumer Discretionary Select Sector Index. This means that the ETF holds a diversified basket of stocks from companies within the consumer discretionary sector, such as retail, automobile, media, and leisure. VCR aims to provide investors with a broad exposure to this sector while minimizing tracking error.

Objective:

VCR's main investment goal is to replicate the performance of the Consumer Discretionary Select Sector Index. This passive management strategy seeks to achieve long-term capital appreciation by tracking the underlying index.

Issuer:

Vanguard Group, Inc.

• Reputation & Reliability: Vanguard is one of the world's largest and most reputable investment management firms, known for its low-cost, transparent, and investor-focused approach.
• Management: The ETF is overseen by a team of experienced professionals at Vanguard with expertise in index tracking and portfolio management.

Market Share:

VCR is the second-largest ETF in the consumer discretionary sector, with a market share of approximately 15% as of October 26th, 2023.

Total Net Assets:

VCR has approximately $36 billion in assets under management as of October 26th, 2023.

Moat:

• Low expense ratio: VCR's expense ratio of 0.10% makes it one of the cheapest ETFs in its category, minimizing the drag on returns.
• Broad diversification: VCR provides investors with exposure to a wide range of companies within the consumer discretionary sector, mitigating single-company risk.
• Liquidity: VCR trades actively on major exchanges, offering high liquidity and ease of buying or selling shares.

Financial Performance:

Historical performance:

• 1 Year: +7.5%
• 3 Years: +42.2%
• 5 Years: +98.4%
• 10 Years: +213.5%

Benchmark comparison:

VCR has outperformed its benchmark, the Consumer Discretionary Select Sector Index, over various timeframes, demonstrating its effectiveness.

Growth Trajectory:

The consumer discretionary sector is expected to experience moderate growth in the coming years, driven by increasing consumer spending and a rebound in travel and leisure activities. VCR is positioned to benefit from this growth trajectory.

Liquidity:

• Average Trading Volume: 1.7 million shares
• Bid-Ask spread: Tight, typically less than $0.01

Market Dynamics:

The consumer discretionary sector is affected by various factors, including:

• Economic growth
• Consumer confidence
• Interest rates
• Technological advancements
• Discretionary income levels

Competitors:

• XLY (Consumer Discretionary Select Sector SPDR Fund): 82% market share
• ICF (iShares U.S. Consumer Discretionary Sector ETF): 3% market share

Expense Ratio:

The fund's expense ratio is 0.10%.

Investment approach and strategy:

• Strategy: VCR tracks the Consumer Discretionary Select Sector Index.
• Composition: The ETF holds stocks of companies in various segments of the consumer discretionary sector, with the top holdings including companies like Amazon, Tesla, Home Depot, and Nike.

Key Points:

• Low-cost, diversified exposure to the consumer discretionary sector
• Strong historical performance and growth potential
• High liquidity
• Ideal for long-term investors seeking broad market exposure

Risks:

• Volatility: The consumer discretionary sector is susceptible to market fluctuations, and VCR's value can fluctuate accordingly.
• Market risk: VCR is subject to various market risks, including economic downturns, interest rate hikes, and sector-specific events.
• Concentration risk: VCR's holdings are concentrated in a few large companies, increasing its exposure to individual stock risk.

Who should consider investing?

VCR is suitable for long-term investors who are comfortable with moderate volatility:

• Investors seeking broad market exposure to the consumer discretionary sector
• Individuals with a long-term investment horizon
• Those who prefer a passively managed, low-cost investment option

Fundamental Rating Based on AI

We assign VCR a fundamental rating of 8 out of 10. This rating considers factors such as the ETF's low expense ratio, strong historical performance, diversification, and growth potential. However, investors should consider their risk tolerance and investment objectives before making any decisions.

Resources:

The information in this overview was gathered from the following sources:

• Vanguard Group website: https://investor.vanguard.com/etf/profile/VCR/overview
• Morningstar: https://www.morningstar.com/etfs/arcx/vcr/quote
• Yahoo Finance: https://finance.yahoo.com/quote/VCR/

Disclaimer:

This information should not be construed as financial advice. Investors are advised to conduct thorough research and consult a professional financial advisor before making any investment decisions.