- Vanguard Growth Index Fund ETF (VUG): Investors focused on growth stocks that are also profitable should research VUG.
- Vanguard Health Care Index Fund ETF (VHT): The pandemic showed investors the importance of buying healthcare stocks and funds for the long-run
- Vanguard S&P Small-Cap 600 Value Index Fund ETF (VIOV): Could be appropriate for investors looking at small U.S. businesses from different industries.
Exchange-traded funds (ETFs) saw a record year in 2021, and “broke through $10 trillion in assets under management (AUM) and collected $1.2 trillion in flows.” Therefore, today we’ll focus on Vanguard ETFs, one of the most important financial institutions worldwide. It is known especially for its ETFs as well as mutual funds.
Globally, the group currently manages about $9 trillion in total assets. Several of the Vanguard ETFs are among the largest funds stateside.
Long-term investors prefer Vanguard ETFs for their overall low expense ratios, intraday liquidity, and diversified asset classes. In fact, Vanguard describes itself as “a leader in low-cost investing.”
Wall Street also regards John Bogle, Vanguard’s founder, as one of the most prominent names in index investing. In 2018, shortly before his death, Bogle cited: “…index funds provide investors with the most effective stock-market strategy of all time: buy American business and hold it forever, and do so at rock-bottom cost… The long-term focus of index funds is a much needed counterweight to the short-termism favored by so many market participants.”
Therefore, we can expect the number of ETFs as well as AUMs to increase in the months ahead. Although higher interest rates will likely become the norm in future quarters leading to higher volatility in shares, long-term investors should still be invested in diversified low-cost funds.
With that information, here are three Vanguard ETFs to buy that could gain traction in April:
| VUG | Vanguard Growth Index Fund ETF | $291.10 |
| VHT | Vanguard Health Care Index Fund ETF | $258.55 |
| VIOV | Vanguard S&P Small-Cap 600 Value Index Fund ETF | $176.27 |
Vanguard ETFs: Vanguard Growth Index Fund ETF (VUG)
52-week range: $253.65 – $328.52
Dividend yield: 051%
Expense ratio: 0.04% per year
Our first ETF, the Vanguard Growth Index Fund ETF (NYSEARCA:VUG), provides a convenient way to match the performance of many of our largest growth shares, “anticipated to grow at a rate significantly above the average for the market.”
A firm’s company’s stock price typically reflects the market’s view regarding how that company should perform in the future. When analyzing shares, investors frequently look at several valuation multiples, including price-to-earnings ratio (P/E), price-to-book ratio (P/B), price-to-sales (P/S), and price-to-cash flow ratio (P/C).
Although it can be an oversimplification to say a trading multiple is too high or too low, growth shares tend to have higher multiples than value stocks. In other words, the market is ready to pay a premium for future high-growth.
VUG, which tracks the CRSP US Large Cap Growth Index, has 267 holdings. The fund started trading in January 2004. Regarding sectors, we see Technology (50.30%), Consumer Discretionary (23.90%) and Industrials (10.30%), among others.
The top 10 stocks in the portfolio account for over half of $162.2 billion in net assets. In other words, this Vanguard ETF is top heavy. Leading holdings in the portfolio include Apple (NASDAQ:AAPL); Microsoft (NASDAQ:MSFT); Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG); and Amazon (NASDAQ:AMZN).
The ETF is down 9% this year, but still up over 10% in the past 12 months. After seeing a record high in November 2021, VUG, as well as many other growth funds, have lost around double digits. Long-term investors could regard this decline in VUG as a good opportunity to buy into robust growth names.
Vanguard Health Care Index Fund ETF (VHT)
52-week range: $227.47 – $268.72
Dividend yield: 1.24%
Expense ratio: 0.1% per year
Next up on our Vanguard ETFs list is the Vanguard Health Care Index Fund ETF (NYSEARCA:VHT). It could appeal to readers looking to invest in businesses that provide healthcare or medical products, therapies, services, or equipment.
VHT, which tracks the MSCI US Investable Market Health Care 25/50 Index, currently has 443 holdings. The fund started trading in January 2004.
In terms of sub-sector, we see Pharmaceuticals (25.20%), Health Care Equipment (19.80%) and Biotechnology (17.10%), among others. The leading 10 stocks comprise roughly 45% of net assets of $19.2 billion.
Leading holdings in the fund include diversified health care group UnitedHealth (NYSE:UNH) and pharma giants Johnson & Johnson (NYSE:JNJ), Pfizer (NYSE:PFE) and AbbVie (NYSE:ABBV).
The ETF is down around 3% this year, but still up over 10% in the past year. Recent metrics suggest that the U.S. spends about a fifth of its gross domestic product (GDP) on healthcare. Therefore, we remain bullish on the healthcare sector as well as many names in VHT.
Vanguard S&P Small-Cap 600 Value Index Fund ETF (VIOV)
52-week range: $164.86 – $193.31
Dividend yield: 1.55%
Expense ratio: 0.15% per year
Our final ETF is the Vanguard S&P Small-Cap 600 Value Index Fund ETF (NYSE:VIOV). It offers exposure to the small-capitalization (cap) names on Wall Street. Small-cap stocks typically have market caps of $300 million to $2 billion.
Research suggests: “The space has more stocks to choose from but significantly less analyst coverage and lower institutional ownership than larger capitalization ranges. The companies tend to be young and nimble with high growth potential.”
VIOV, which tracks the S&P Small-Cap 600 Value Index, currently has 463 holdings. The fund started trading in September 2010. With regards to sectors, we see Financials (20.90%), Industrials (18.30%) and Consumer Discretionary (12.00%), among others.
Leading holdings in the portfolio include financial services names BankUnited (NYSE:BKU) and First Hawaiian (NASDAQ:FHB); petroleum drilling solutions provider Helmerich & Payne (NYSE:HP); and mortgage servicer Mr. Cooper (NASDAQ:COOP). The top 10 stocks in the portfolio account for close to 7% of about $1.4 billion in net assets.
The ETF is down almost 1% this year, but up about 2% in the past year. For buy-and-hold investors, a fund like VIOV offers the potential to participate in the growth of the U.S. small-cap space.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
