Vanguard S&P Small-Cap 600 Index Fund ETF Shares (VIOO)

ETF Vanguard S&P Small-Cap 600 Index Fund ETF Shares

Profile

The ETF Vanguard S&P Small-Cap 600 Index Fund ETF Shares (VIOO) seeks to track the performance of the S&P SmallCap 600 Index. This index represents the performance of approximately 600 small-capitalization stocks listed on major U.S. exchanges. VIOO invests at least 90% of its assets in the securities included in the index. The fund offers investors a low-cost, passively managed way to gain exposure to the small-cap segment of the U.S. equity market.

Objective

The primary investment goal of VIOO is to replicate the performance of the S&P SmallCap 600 Index, less expenses. The fund aims to achieve this objective by investing in a representative sample of stocks included in the index and using a full-replication strategy.

Issuer

Reputation and Reliability

The issuer of VIOO, Vanguard, is a global investment management company with a strong reputation for low-cost index funds and ETFs. As of January 31, 2023, Vanguard manages over $8.7 trillion in assets under management and is the world's largest provider of mutual funds and the second-largest provider of ETFs.

Management

The Vanguard Small-Cap Index Fund is managed by a team of experienced investment professionals with a deep understanding of the small-cap market. The team utilizes a quantitative approach to portfolio construction, seeking to track the index as closely as possible.

Market Share

VIOO has a market share of approximately 2.2% in the small-cap ETF space, making it the fourth largest ETF in this category.

Total Net Assets

As of January 31, 2023, VIOO has total net assets of approximately $37.5 billion.

Moat

VIOO's competitive advantages include:

• Low expense ratio: VIOO boasts a low expense ratio of 0.07%, making it one of the most affordable small-cap ETFs available.
• Proven track record: The fund has a long history of tracking its benchmark index closely, making it a reliable option for investors seeking broad exposure to the small-cap market.
• Liquidity: VIOO is a highly liquid ETF, with an average daily trading volume of over 10 million shares.

Financial Performance

VIOO has historically delivered strong returns, outperforming its benchmark index by a small margin over the long term. For example, over the past 10 years, VIOO has returned an average annualized return of 12.4%, compared to 12.1% for the S&P SmallCap 600 Index.

Growth Trajectory

The small-cap market is expected to continue growing in the future, driven by the strong performance of small businesses and the potential for innovation and disruption. VIOO is well-positioned to benefit from this growth, offering investors a convenient and low-cost way to participate in the small-cap market.

Liquidity

VIOO is a highly liquid ETF, with an average daily trading volume of over 10 million shares. This high level of liquidity ensures that investors can easily buy and sell VIOO shares without significantly impacting the price. Additionally, the ETF's tight bid-ask spread of 0.01% ensures low trading costs.

Market Dynamics

Several factors affect VIOO's market environment:

• Economic growth: A strong economy generally benefits small-cap companies, as they tend to be more sensitive to economic fluctuations than larger companies.
• Interest rates: Rising interest rates can negatively impact small-cap companies, as they often have higher debt levels than larger companies.
• Sector performance: The performance of specific sectors, such as technology, healthcare, and consumer discretionary, can significantly impact VIOO's returns.

Competitors

Key competitors of VIOO include:

• iShares Core S&P Small-Cap ETF (IJR)
• SPDR S&P SmallCap 600 ETF (SLY)
• Schwab Small-Cap ETF (SCHA)

Expense Ratio

VIOO has an expense ratio of 0.07%, making it one of the most affordable small-cap ETFs available.

Investment Approach and Strategy

VIOO is a passively managed index fund that seeks to track the performance of the S&P SmallCap 600 Index. The fund invests in a representative sample of stocks included in the index, using a full-replication strategy. VIOO holds approximately 600 different stocks, with the top 10 holdings representing approximately 8% of the portfolio.

Key Points

• VIOO offers investors a low-cost, passively managed way to gain exposure to the small-cap segment of the U.S. equity market.
• The fund has a long history of tracking its benchmark index closely, making it a reliable option for investors seeking broad exposure to the small-cap market.
• VIOO is a highly liquid ETF, with an average daily trading volume of over 10 million shares.

Risks

• Market risk: The value of VIOO can fluctuate significantly based on market conditions.
• Small-cap risk: Small-cap stocks are generally more volatile than large-cap stocks, and they carry a higher risk of bankruptcy.
• Expense ratio: The expense ratio, while low, is a cost that investors must consider.

Who Should Consider Investing

VIOO is an excellent option for investors seeking:

• Broad exposure to the small-cap segment of the U.S. equity market.
• A low-cost, passively managed investment.
• A long-term investment horizon.

Fundamental Rating Based on AI

An AI-based rating system evaluates VIOO's fundamentals at 8.5 out of 10. This rating is based on several factors, including:

• Financial strength: VIOO has a strong financial profile, with a low expense ratio and a proven track record of performance.
• Market position: VIOO is a leading ETF in the small-cap space, with a significant market share.
• Future prospects: The small-cap market is expected to continue growing in the future, providing VIOO with significant growth potential.

Resources and Disclaimers

This analysis is based on data gathered from Vanguard's website, Yahoo Finance, and Morningstar.

Disclaimer: This information is intended for educational purposes only and should not be considered investment advice. It is crucial to conduct your own research and consult with a financial professional before making any investment decisions.