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Looking for broad exposure to the Industrials - Broad segment of the equity market? You should consider the Vanguard Industrials ETF (VIS), a passively managed exchange traded fund launched on 09/23/2004.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $3.48 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)/Industrials 25/50 is made up of stocks of large, mid-size, and small U.S. companies within the industrials sector.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 1.40%.
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 Industrials sector--about 98.30% of the portfolio.
Looking at individual holdings, Raytheon Technologies Corp. (RTX) accounts for about 3.89% of total assets, followed by Union Pacific Corp. (UNP) and United Parcel Service Inc. (UPS).
The top 10 holdings account for about 30.71% of total assets under management.
Performance and Risk
The ETF has lost about -12.24% and is down about -10.51% so far this year and in the past one year (as of 09/01/2022), respectively. VIS has traded between $159.78 and $207.50 during this last 52-week period.
The ETF has a beta of 1.15 and standard deviation of 27.15% for the trailing three-year period, making it a medium risk choice in the space. With about 374 holdings, it effectively diversifies company-specific risk.