Vanguard Mid-Cap ETFVO

Morningstar Rating

ETF Research and Analysis

by Michael Rawson, CFA

Suitability
Vanguard Mid-Cap ETF VO recently switched indexes to the CRSP US Mid Cap Index from a similar index provided by MSCI. The change should eventually result in a lower expense ratio for the ETF, without any meaningful change Read more

Bull Case

Along with Vanguard's mega- and small-cap ETFs, this fund allows index investors to precisely control their market-cap exposures with minimal holdings overlap.

Mid-caps have historically provided a slight return premium over large-cap stocks.

This fund is broadly diversified and cheaper nearly every other mid-cap ETF. Read more

Bear Case

Mid-caps are a more volatile area of the equities universe because of the greater sensitivity to macroeconomic risks.

The unique legal structure of Vanguard ETFs means this fund has to share the tax-efficiency benefits of its ETF structure with the open-end share classes.

This fund has lower trading volumes than rival mid-cap ETFs, which could raise costs for institutions trading millions of dollars. Read more