Summary
The Vanguard Extended Market ETF (VXF) is a passively managed exchange traded fund that offers broad exposure to the Mid Cap Blend segment of the US equity market. Launched in 2001, this fund has amassed assets over $21.62 billion and is sponsored by Vanguard. With an expense ratio of 0.05%, VXF provides investors with a cost-effective option for gaining access to mid-cap companies that offer a balance of growth potential and stability.
The Importance of Mid Cap Blend
Mid cap companies, typically those with market capitalization in the range of $2 billion and $10 billion, have several advantages over small and large companies. They tend to exhibit less risk while still offering higher growth opportunities. This makes mid-cap stocks an attractive option for investors seeking a balance between stability and potential returns.
One key characteristic of mid cap blend ETFs is that they hold a mix of growth and value stocks, as well as those that exhibit both value and growth characteristics. This blend provides investors with a diversified portfolio that can help minimize single stock risk. However, it’s essential for investors to pay attention to the expense ratio of an ETF, as lower cost products tend to produce better results over time.
Sector Exposure and Top Holdings
A deep look into VXF’s holdings reveals its heavy allocation to the Financials sector, accounting for approximately 18.60% of the portfolio. Information Technology and Industrials round out the top three sectors. Upon examining individual holdings, it becomes clear that Slcmt1142 accounts for about 1.44% of total assets, followed by Microstrategy Inc (MSTR) and Crh Plc (CRH).
Performance and Risk
VXF seeks to match the performance of the S&P Completion Index before fees and expenses. This index contains all U.S. common stocks regularly traded on the New York Stock Exchange and the Nasdaq over-the-counter market, except those included in the S&P 500 Index. The ETF has experienced a decline of about -1.66% so far this year but is up roughly 11.75% in the last one year (as of 06/04/2025). In the past 52-week period, it has traded between $150.43 and $207.15.
A beta of 1.17 and a standard deviation of 22.67% for the trailing three-year period make VXF a medium risk choice in the space. With approximately 3390 holdings, the ETF effectively diversifies company-specific risk, providing investors with a relatively stable option for accessing mid-cap companies.
Alternatives
Vanguard Extended Market ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum. Other options in the space include the Vanguard Mid-Cap ETF (VO) and the iShares Core S&P Mid-Cap ETF (IJH). These two ETFs track similar indexes but have different expense ratios. VO charges 0.04%, while IJH has an expense ratio of 0.05%.
Conclusion
The Vanguard Extended Market ETF offers investors a cost-effective option for gaining exposure to the Mid Cap Blend segment of the US equity market. With its transparent holdings, diversified portfolio, and relatively stable performance, VXF is an attractive choice for long-term investors seeking access to mid-cap companies that balance growth potential with stability. As investors continue to seek out low-cost, passively managed ETFs, VXF stands as a viable option in the Style Box – Mid Cap Blend area of the market.