Is it worth investing in the Vanguard Industrials ETF (VIS)?

Founded on September 23, 2004, the Vanguard Industrials ETF (VIS) is a passively managed, exchange-traded fund designed to provide broad exposure to a broad segment of the Industrials equity market.

Passively managed ETFs are becoming increasingly popular among institutional and retail investors due to their low cost, transparency, flexibility and tax efficiency. They are perfect instruments for long-term investors.

Investor-friendly sector ETFs provide many opportunities to gain low risk and diversified exposure to a wide range of companies in specific sectors. Industry – Broad is one of the 16 Zacks Broad Sectors in the Zacks Industry Ranking. It is currently ranked 2nd, ranking in the top 13%.

Index details

The fund’s sponsor is Vanguard. It has accumulated assets of over $5.37 billion, making it one of the largest ETFs trying to match the performance of the Industrials – Broad segment of the stock 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 index consists of shares of large, mid-sized and small US industrial companies.

Costs

Investors should also pay attention to the ETF’s expense ratio. Lower-cost products will produce better results than higher-cost ones, assuming all other metrics remain the same.

The annual operating costs of this ETF are 0.10%, making it one of the cheapest products on the market.

Its trailing 12-month dividend yield is 1.24%.

Sector exposure and largest assets

Although ETFs offer diversified exposure that minimizes the risk of a single stock, investors should also look at the fund’s actual holdings. Fortunately, most ETFs are very transparent products that disclose their holdings every day.

This ETF has the largest allocation to the industrial sector at approximately 99.90% of the portfolio.

In terms of individual holdings, General Electric Co (GE) holds about 3.45% of total assets, followed by Caterpillar Inc (CAT) and Union Pacific Corp (UNP).

The story continues

Performance and risk

So far this year, the return on VIS is approximately 10.24% and has increased by approximately 29.62% over the past year (as of May 22, 2024). Over the past 52 weeks, the fund has traded between $183.76 and $244.15.

The ETF has a beta of 1.12 and a standard deviation of 17.91% for the trailing three-year period, making it a medium-risk pick in this space. With approximately 393 shares, it effectively diversifies company-specific risk.

Alternatives

The Vanguard Industrials ETF carries a Zacks ETF Rank of 3 (Hold), which is based on asset class expected return, expense ratio and momentum, among other factors. Therefore, VIS is a good option for those looking for exposure to the industrial ETF market. Investors may also want to consider other ETF options in this area.

The First Trust Industrials/Producer Durables AlphaDEX ETF (FXR) tracks the StrataQuant Industrials Index and the Industrial Select Sector SPDR ETF (XLI) tracks the Industrial Select Sector Index. The First Trust Industrials/Producer Durables AlphaDEX ETF has $1.94 billion in assets and the Industrial Select Sector SPDR ETF has $18.61 billion in assets. FXR has an expense ratio of 0.61% and XLI charges 0.09%.

Bottom line

To learn more about this product and other ETFs, find products that match your investment goals, and read articles on the latest developments in the world of ETF investing, visit the Zacks ETF Center.

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Vanguard Industrials ETF (VIS): ETF Research Reports

GE Aerospace (GE): Free Stock Analysis Report

Caterpillar Inc. (CAT): Free Inventory Analysis Report

Union Pacific Corporation (UNP): Free Stock Analysis Report

Industrial Selected Sector SPDR ETF (XLI): ETF Research Reports

First Trust Industrials/Producer Durables AlphaDEX ETF (FXR): ETF Research Reports

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