The top five holdings of this fund are: Vail Resorts Inc (MTN, 0.66% of assets); PTC Inc (PTC, 0.64%); Burlington Stores Inc (BURL, 0.61%); Jack Henry & Associates Inc (JKHY, 0.60%); and GrubHub Inc (GRUB, 0.56%).
Vanguard Small-Cap Growth ETF (VBK)
From The No-Load Fund Investor
The positive growth impact of the tax reform on the U.S. economy should prove considerably
greater than the negative impact from more tariffs on trade (e.g., higher inflation) and a potential decline in either the growth of exports or even modestly less export revenue.
The U.S. economy is strong, while growth overseas, especially in Europe, appears to be slowing. This suggests underweighting and overweighting certain ranges of market capitalization and investment style, depending on countries and regions in question.
For U.S. stocks, it suggests that small stocks should outperform, because they are generally more sensitive to the U.S. economy and less sensitive to growth overseas. For foreign stocks, slowing growth outside the U.S. suggests favoring growth companies of any size, and limiting one’s exposure to value stocks. It also means being careful about having too much exposure to emerging markets.
We’re taking a new position in Vanguard Small-Cap Growth ETF (VBK), mainly because small cap growth stocks are growing faster, yet are priced similarly, as mid-cap growth equities. The fund’s strong past earnings growth results in easily the lowest PEG, suggesting it may be the best
‘value’ now.
Mark Salzinger, The No-Load Fund Investor, 800-706-6364, www.noloadfundinvestor.com, July 2018