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Should You Invest in the Vanguard Industrials ETF (VIS)?

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Designed to provide broad exposure to the Industrials - Broad segment of the equity market, the Vanguard Industrials ETF (VIS) is 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 5, placing it in top 31%.

Index Details

The fund is sponsored by Vanguard. It has amassed assets over $3.25 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

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 0.10%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.51%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Industrials sector--about 98.20% of the portfolio.

Looking at individual holdings, Union Pacific Corp. (UNP) accounts for about 3.98% of total assets, followed by United Parcel Service Inc. And Honeywell International Inc. (HON).

Performance and Risk

Year-to-date, the Vanguard Industrials ETF has lost about -18.62% so far, and is down about -15.22% over the last 12 months (as of 06/30/2022). VIS has traded between $159.78 and $207.50 in this past 52-week period.

The ETF has a beta of 1.16 and standard deviation of 27.09% for the trailing three-year period, making it a medium risk choice in the space. With about 354 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard Industrials ETF 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, VIS is an outstanding option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

First Trust IndustrialsProducer Durables AlphaDEX ETF (FXR) tracks StrataQuant Industrials Index and the Industrial Select Sector SPDR ETF (XLI) tracks Industrial Select Sector Index. First Trust IndustrialsProducer Durables AlphaDEX ETF has $1.41 billion in assets, Industrial Select Sector SPDR ETF has $12.85 billion. FXR has an expense ratio of 0.61% and XLI charges 0.10%.

Bottom Line

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.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Vanguard Industrials ETF (VIS): ETF Research Reports
 
Honeywell International Inc. (HON) : Free Stock Analysis Report
 
Union Pacific Corporation (UNP) : Free Stock Analysis Report
 
Industrial Select Sector SPDR ETF (XLI): ETF Research Reports
 
First Trust IndustrialsProducer Durables AlphaDEX ETF (FXR): ETF Research Reports
 
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