Should you invest in the Vanguard Industrials ETF (VIS)?
DDesigned to provide broad exposure to the industrials – broad segment of the equity market, the Vanguard Industrials ETF (VIS) is a passively managed exchange-traded fund launched on 09/23/2004.
Passively managed ETFs are increasingly popular with institutional and retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long-term investors.
Investor-friendly sector ETFs offer many options for gaining low-risk, diversified exposure to a broad group of companies in particular industries. Industry – Large is one of 16 major Zacks sectors within the Zacks Industry classification. He is currently ranked 5, which puts him in the top 31%.
The fund is sponsored by Vanguard. It has amassed assets of over $4.53 billion, making it one of the largest ETFs attempting to match the performance of the Industrials – Broad segment of the equity market. VIS seeks to match the performance of the MSCI US Investable Market Industrials 25/50 Index before fees and expenses.
The MSCI US Investable Market Index (IMI)/Industries 25/50 Index is comprised of stocks of large, medium and small US companies in the industrial sector.
Since cheaper funds tend to perform better than more expensive funds, assuming all other factors remain equal, it’s important for investors to pay attention to an ETF’s expense ratio.
The annual operating expense of this ETF is 0.10%, making it one of the cheapest products on the market.
It has a 12-month dividend yield of 1.27%.
Sector exposure and main holdings
Although ETFs provide diversified exposure, which minimizes single-stock risk, a thorough examination of a fund’s holdings is a valuable exercise. And most ETFs are very transparent products that disclose their holdings on a daily basis.
With respect to individual holdings, Union Pacific Corp. (UNP) accounts for approximately 3.98% of total assets, followed by United Parcel Service Inc. and Honeywell International Inc. (HON).
Performance and risks
The ETF has lost around -7.91% so far this year and is down around -3.10% over the past year (as of 4/25/2022). During this last 52-week period, it traded between $180.53 and $207.50.
The ETF has a beta of 1.18 and a standard deviation of 26.43% for the three-year period, making it a medium-risk pick in the space. With approximately 354 holdings, it effectively diversifies company-specific risks.
Vanguard Industrials ETF holds a Zacks ETF rating of 1 (Strong Buy), which is based on the asset class’s expected return, expense ratio, and momentum, among other factors. For this reason, VIS is an exceptional option for investors who want exposure to the industrial ETF segment of the market. There are other additional ETFs in the space that investors might also consider.
First Trust IndustrialsProducer Durables AlphaDEX ETF (FXR) tracks the StrataQuant Industrials Index and the SPDR Industrial Select Sector ETF (XLI) tracks the Industrial Select Sector Index. First Trust IndustrialsProducer Durables AlphaDEX ETF has $1.65 billion in assets, Industrial Select Sector SPDR ETF has $14.95 billion. FXR has an expense ratio of 0.61% and XLI charges 0.10%.
To learn more about this product and other ETFs, find products that fit your investment goals, and read articles about the latest developments in the ETF investment universe, please visit Zacks ETF Center.
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Vanguard Industrials ETF (VIS): ETF Research Reports
Honeywell International Inc. (HON): Free Stock Analysis Report
Union Pacific Corporation (UNP): Free Stock Analysis Report
ETF SPDR selected industrial sector (XLI): ETF research reports
First Trust IndustrialsProducer Durables AlphaDEX ETF (FXR): ETF Research Reports
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Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.