Launched on 01/26/2004, the Vanguard Consumer Discretionary ETF (VCR) is a passively managed exchange traded fund designed to provide a broad exposure to the Consumer Discretionary - Broad segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $4.80 billion, making it one of the largest ETFs attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. VCR seeks to match the performance of the MSCI US Investable Market Consumer Discretionary 25/50 Index before fees and expenses.
The MSCI US Investable Market Consumer Discretionary 25/50 Index is designed to transition in and out of securities affected by pending updates to the consumer discretionary sector.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.97%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Discretionary sector--about 100% of the portfolio.
Looking at individual holdings, Amazon.com Inc. (AMZN) accounts for about 23.47% of total assets, followed by Tesla Inc. (TSLA) and Home Depot Inc. (HD).
The top 10 holdings account for about 53.75% of total assets under management.
Performance and Risk
The ETF has gained about 23.90% so far this year and it's up approximately 20.47% in the last one year (as of 10/17/2023). In that past 52-week period, it has traded between $213.95 and $296.58.
The ETF has a beta of 1.29 and standard deviation of 25.07% for the trailing three-year period, making it a medium risk choice in the space. With about 309 holdings, it effectively diversifies company-specific risk.