Should Vanguard S&P Mid-Cap 400 Index Fund ETF Shares (IVOO) Be on Your Investing Radar?

The Vanguard S&P Mid-Cap 400 Index Fund ETF Shares (IVOO) was launched on September 9, 2010, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Blend segment of the US equity market.

The fund is sponsored by Vanguard. It has amassed assets over $3.18 billion, making it one of the average sized ETFs attempting to match the Mid Cap Blend segment of the US equity market.

Why Mid Cap Blend

Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. These types of companies, then, have a good balance of stability and growth potential.

Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.

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 0.07%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.29%.

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 to the Industrials sector -- about 25% of the portfolio. Financials and Information Technology round out the top three.

Looking at individual holdings, Ciena Corp (CIEN) accounts for about 1.02% of total assets, followed by Coherent Corp (COHR) and Lumentum Holdings Inc (LITE).

The top 10 holdings account for about 4.74% of total assets under management.

Performance and Risk

IVOO seeks to match the performance of the S&P MidCap 400 Index before fees and expenses. The S&P MidCap 400 Index measures the performance of the mid-cap segment of the U.S. equity universe. The Index is a capitalization-weighted index composed of 400 domestic common stocks.

The ETF has added about 4.38% so far this year and was up about 16.77% in the last one year (as of 03/10/2026). In the past 52-week period, it has traded between $86.58 and $122.12.

The ETF has a beta of 1.04 and standard deviation of 17.97% for the trailing three-year period, making it a medium risk choice in the space. With about 408 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard S&P Mid-Cap 400 Index Fund ETF Shares holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IVOO is a great option for investors seeking exposure to the Style Box - Mid Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Vanguard Mid-Cap Index Fund ETF Shares (VO) and the iShares Core S&P Mid-Cap ETF (IJH) track a similar index. While Vanguard Mid-Cap Index Fund ETF Shares has $94.66 billion in assets, iShares Core S&P Mid-Cap ETF has $107.65 billion. VO has an expense ratio of 0.03% and IJH charges 0.05%.

Bottom-Line

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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Vanguard S&P Mid-Cap 400 Index Fund ETF Shares (IVOO): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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