This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Vanguard Launches Bid to Lead Broad Market

Stocks in this article: VOOV IVE IVOO

  • Vanguard S&P Small-Cap 600 ETF (VIOO) has an expense ratio of 0.15% and will compete directly with iShares S&P SmallCap 600 (IJR), which has a 0.20% expense ratio.
  • Vanguard S&P Small-Cap 600 Growth ETF (VIOG) has an expense ratio of 0.20% and will compete directly with iShares S&P SmallCap 600 Growth (IJT), which has a 0.25% expense ratio.
  • Vanguard S&P Small-Cap 600 Value ETF (VIOV) has an expense ratio of 0.20% and will directly directly with iShares S&P SmallCap 600 Value (IJS), which has a 0.25% expense ratio.
  • Expense ratios are not the only factor when choosing between ETFs tracking identical indexes. Other consideration include commissions, dividend payment policies, liquidity and tracking error:

  • Commissions: The Vanguard ETFs are commission-free for clients of Vanguard, and the iShares ETFs listed above are commission-free for clients of Fidelity. Investors using other firms and anyone trading the SPDR ETFs will have to pay standard brokerage commissions.
  • Dividend payment policy: Vanguard and iShares typically follow the "industry best practice" of paying dividends within four business days of the ex-dividend date. SPDR has one of the most egregious dividend policies of any ETF sponsor by delaying dividend payments from SPDR S&P 500 (SPY) up to six weeks.
  • Liquidity: SPY wins the liquidity argument hands down, as it typically accounts for more than a third of all ETF dollar volume every month. The nine competitive products from iShares are in the top 20% of all ETFs for average dollar volume and assets under management. The new Vanguard products have some catching up to do in this regard, but based on the success of their other products, this should not be a significant disadvantage for too long.
  • Tracking Error: The S&P indexes are well understood, and all three firms have extensive experience managing products based on them. The new ETFs will likely own all stocks in the index being tracked and not rely on sampling techniques. Therefore, any tracking error is likely to be insignificant.
  • When I first saw the ticker symbols for the new Vanguard ETFs, I thought they were just a hodgepodge of letters with Vs and Gs stuck on the end to distinguish Value from Growth. Then someone pointed out that the letters on the front are derivatives of roman numerals: V for 5 and VOO for S&P 500, IV for 4 and IVOO for S&P 400, VI for 6 and VIOO for S&P 600. I have them memorized already.

    >To submit a news tip, email:

    Readers Also Like:

    Follow on Twitter and become a fan on Facebook.

    Ron Rowland is long IJH but has no positions in the companies or ETF sponsors mentioned. No income, revenue or other compensation (either directly or indirectly) is received from, or on behalf of, any of the companies or ETF sponsors mentioned. Rowland is the founder and president of Capital Cities Asset Management, a fee-based registered investment adviser in Austin, Texas. He is also the founder and publisher of Invest With An Edge and All Star Investor, where he has been providing market commentary and active investment advice since 1991. Opinions expressed in this article should not be considered personal recommendations to buy or sell any security.
    2 of 2

    Select the service that is right for you!

    Action Alerts PLUS
    Try it NOW

    Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

    Product Features:
    • $2.5+ million portfolio
    • Large-cap and dividend focus
    • Intraday trade alerts from Cramer
    • Weekly roundups
    TheStreet Quant Ratings
    Try it NOW
    Only $49.95/yr

    Access the tool that DOMINATES the Russell 2000 and the S&P 500.

    Product Features:
    • Buy, hold, or sell recommendations for over 4,300 stocks
    • Unlimited research reports on your favorite stocks
    • A custom stock screener
    • Upgrade/downgrade alerts
    Stocks Under $10
    Try it NOW

    David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

    Product Features:
    • Model portfolio
    • Stocks trading below $10
    • Intraday trade alerts
    • Weekly roundups
    Dividend Stock Advisor
    Try it NOW

    Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

    Product Features:
    • Diversified model portfolio of dividend stocks
    • Alerts when market news affect the portfolio
    • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
    Real Money Pro
    Try it NOW

    All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

    Product Features:
    • Real Money + Doug Kass Plus 15 more Wall Street Pros
    • Intraday commentary & news
    • Ultra-actionable trading ideas
    Options Profits
    Try it NOW

    Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

    Product Features:
    • 100+ monthly options trading ideas
    • Actionable options commentary & news
    • Real-time trading community
    • Options TV
    To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
    Submit an article to us!


    DOW 18,053.71 +23.50 0.13%
    S&P 500 2,088.77 +6.89 0.33%
    NASDAQ 4,806.8590 +33.3870 0.70%

    Brokerage Partners

    Rates from

    • Mortgage
    • Credit Cards
    • Auto

    Free Newsletters from TheStreet

    My Subscriptions:

    After the Bell

    Before the Bell

    Booyah! Newsletter

    Midday Bell

    TheStreet Top 10 Stories

    Winners & Losers

    Register for Newsletters
    Top Rated Stocks Top Rated Funds Top Rated ETFs