Mid-cap stock funds are powerful tools. Smaller stocks in these ETFs offer bigger returns than you’ll find in entrenched large-cap names, but they are middle-sized and thus not as volatile as tiny start-ups.
Investors that buy mid-cap stock ETFs are usually looking for an aggressive core holding or a complement to other funds in a diversified portfolio that might also include large-cap stock funds and small-cap stock funds, among other holdings.
No matter what the reason for buying mid-cap stock ETFs, you’ll want to look at Vanguard funds first. What you’ll get at Vanguard is low-cost, broad exposure to U.S stocks that combine for a mid-sized average capitalization.
And since Vanguard ETFs offer four different types to choose from, investors can pick the best mix of mid-caps that works for them.
Vanguard Mid-Cap Stock ETFs
Vanguard Extended Market ETF (NYSEARCA:VXF): Vanguard’s VXF makes an outstanding complement to an S&P 500 index fund because it holds all U.S. stocks that are not in the S&P 500, hence the extended market moniker. VXF tracks the S&P Completion index, which represents more than 3,000 small- and mid-cap stocks. The expense ratio for VXF is 0.08%, or $8 for every $10,000 invested.
Vanguard Mid-Cap ETF (NYSEARCA:VO): Investors looking for a pure mid-cap stock ETF will like what they see in Vanguard’s VO. Mid-cap stocks can be a smart way to maximize return in a portfolio without the added risk of stocks with smaller capitalizations. VO passively tracks the CRSP Mid-Cap Index, which represents more than 300 U.S. mid-cap stocks. The expense ratio is 0.06%, or $6 for every $10,000 invested.
Vanguard Mid-Cap Growth ETF (NYSEARCA:VOT): This ETF from Vanguard holds a basket of mid-cap growth stocks, which can be an aggressive but smart addition to a diversified portfolio. VOT passively tracks the performance of the CRSP US Mid Cap Growth Index, which covers about 150 U.S. mid-cap growth stocks. The expense ratio for VOT is 0.07%, or $7 for every $10,000 invested.
Vanguard Mid-Cap Value ETF (NYSEARCA:VOE): To round out the mix of Vanguard mid-cap stock ETFs, Vanguard’s VOE holds a basket of mid-cap value stocks. This index fund passively tracks the CRSP US Mid Cap Value Index, which consists of more than 200 U.S. value stocks averaging at the mid-cap range. The expense ratio for VOE is 0.07%, or $7 for every $10,000 invested.
As of this writing, Kent Thune did not personally hold a position in any of the aforementioned securities. His No. 1 holding is his privately held investment advisory firm. Under no circumstances does this information represent a recommendation to buy or sell securities.