From Nasdaq: 2024-08-04 10:00:00

Large-cap growth stocks are in retreat due to anticipated interest rate cuts and valuation concerns. Small and mid-cap stocks stand to benefit more from rate cuts due to their reliance on financing for growth. Three Vanguard ETFs are positioned to outperform as the market shifts towards smaller, growth-oriented companies with attractive valuations.

The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) tracks the CRSP US Small Cap Value Index, offering an SEC yield of 2.1% and an expense ratio of 0.07%. Top holdings include Booz Allen Hamilton and Carlisle Cos. This ETF has gained 10.8% year to date, with potential for more growth as interest rates fall and small-cap value stocks perform well.

Vanguard’s Mid-Cap Index Fund ETF Shares (VO) tracks the CRSP US Mid Cap Index, with an SEC yield of 1.56% and an expense ratio of 0.04%. Top holdings include Amphenol and TransDigm Group. This ETF has gained 8.41% year to date, providing exposure to mid-sized companies that may benefit from changing interest rates.

The Vanguard Small-Cap Index Fund ETF Shares (VB) tracks the CRSP US Small Cap Index, offering an SEC yield of 1.44% and an expense ratio of 0.05%. Top holdings include Targa Resources and Deckers Outdoor. This ETF has jumped by 9.45% year to date, providing exposure to the small-cap market’s responsiveness to rate changes.

Investors may shift to value-focused growth companies, affecting high valuation tech giants like Nvidia. The Motley Fool Stock Advisor suggests 10 alternative stocks for investors. Consider diversifying $1,000 into these stocks for potential high returns. As interest rates shift, small and mid-cap stocks may prove advantageous investments with the potential for growth.



Read more at Nasdaq: 3 Best Vanguard Stock ETFs to Buy in August