Vanguard S&P Mid-Cap 400 Index Fund ETF Shares IVOO

Vanguard S&P Mid-Cap 400 ETF holds a quantitatively derived Gold Morningstar Medalist Rating. The rating reflects that it has scored particularly well on factors Morningstar research associates with future outperformance relative to category peers.

People: Above Average

Note: This share class' People Pillar rating and analysis are inherited from an analyst-covered share class under the same Strategy Provider Company (rolled up to Branding Name) and Morningstar Category Broad Group: Vanguard FTSE All-Wld ex-US SmCp ETF (SecID: FOUSA08NFZ).

Process: High

Note: This share class' Process Pillar rating and analysis are inherited from an analyst-covered passive share class, which tracks the same index: iShares Core S&P Mid-Cap ETF (SecID: FEUSA0000H).

Performance (in US Dollar)

Over the past 12 months, Vanguard S&P Mid-Cap 400 ETF share class returned 29.4%, outperforming both its category index, the Morningstar US Mid TR USD Index (25.7%), and its Morningstar category peers (26.7%). Over 10 years, the fund returned 11.2% per year, underperforming the index (12.2% per year) and ahead of its Morningstar Category average (10.4% per year).

Price

Vanguard S&P Mid-Cap 400 ETF's Prospectus Adjusted Expense Ratio is 0.07% per year. It places it in the cheapest quintile of the Morningstar US Fund Mid-Cap Blend Category, where the median fee is 0.83% per year. This cost positioning translates into a Medalist Rating Price Score of 2.2, which reflects its relative price positioning within the category. The Price Score ranges from -2.50 (most expensive) to +2.50 (cheapest), with higher scores indicating better cost competitiveness.

The S&P MidCap 400 Index selects the 400 largest US stocks after the S&P 500 that pass its liquidity, size, and profitability screens. The profitability screen requires that a company’s earnings based on generally accepted accounting principles over the past four quarters be positive, as well as the most recent quarter's. The index weights stocks by market cap and rebalances quarterly. A committee oversees the selection process, shuffling holdings only when it finds it necessary. While a committee-based approach lacks transparency, the added flexibility can reduce unnecessary changes and associated transaction costs during reconstitutions.

Market-cap weighting makes sense for mid-cap stocks. It relies on the market’s collective wisdom to determine the relative value of each holding. In addition, it can reduce transaction costs since holdings’ weights automatically adjust when their prices fluctuate. While not as efficient as the highly liquid large-cap market, mid-cap stocks also generally reflect information quickly, meaning it is harder for active managers to gain an edge.

The index selects stocks farther down the market-cap spectrum than most mid-cap funds. Its average market cap was around USD 11 billion at the end of February 2026, which was about USD 7 billion smaller than the average US Mid-Cap Blend Morningstar Category fund. While smaller stocks are generally more volatile, the index’s profitability screen may help mitigate that risk. Size discrepancies can lead to divergent performance among mid-blend funds.

Sector allocations reasonably approximate the opportunity set. Cyclical and defensive stocks tend to dominate the portfolio. That can lead to increased volatility; however, the Morningstar US Mid Index also leans heavily into those super sectors. Individual sector weightings tend to hew within 6 percentage points of that index. Holding 400 stocks keeps the index well diversified, and the portfolio has typically held less than 10% of its portfolio in its 10 largest stock holdings.

Note: This share class' Process Pillar rating and analysis are inherited from an analyst-covered passive share class which tracks the same index: iShares Core S&P Mid-Cap ETF (SecID: FEUSA0000H).

Vanguard's equity index group earns an Above Average People Pillar rating for its well-supported and stable management team that's adept at leveraging Vanguard's comprehensive resources. Its portfolio managers benefit from the firm's global infrastructure and advanced portfolio management technology, which facilitates cost-efficient trading around the globe. The infrequent turnover of managers, coupled with Vanguard's practice of rotating them across various funds, enhances their expertise and understanding of different market segments.

The fund's managers directly handle trading, providing them with deeper insights into the portfolio's operations than a stand-alone trader might have. They are backed by a global team of dedicated personnel and employ sophisticated, scalable technology to minimize their workload and enhance tracking accuracy. Vanguard's independent risk management team plays a crucial role in ensuring its funds adhere to predetermined tracking tolerances. It collaborates closely with the managers to oversee trades and address potential issues proactively. Vanguard compensates managers based on tracking error and excess return metrics to foster a culture of accountability and ensure that the management team's interests are closely tied to investors'.

Note: This share class' People Pillar rating and analysis are inherited from an analyst-covered share class under the same Strategy Provider Company (rolled up to Branding Name) and Morningstar Category Broad Group: Vanguard FTSE All-Wld ex-US SmCp ETF (SecID: FOUSA08NFZ).

Vanguard maintains its High Parent Pillar rating as it continues to grow under new leadership.

CEO Salim Ramji has had a busy first year captaining Vanguard’s crew, and the ship remains pointed in the right direction. The firm made its largest round of fee cuts in early 2025, which came at an estimated cost of USD 350 million. It established a separate division dedicated to its advice and wealth management efforts, a sign that it wants to seriously compete within those lines of business. Asset growth has continued to be a huge success. Only BlackRock’s inflows rival the money Vanguard is taking in. Likewise, the number of clients it serves has more than doubled since 2015.

Despite that success, an ever-growing number of clients has presented a challenge: Vanguard can’t grow its services fast enough to keep up with demand. In some instances, it has had to curb certain services and capabilities or raise fees on others to cope, causing some loyal clients to criticize what they perceive as deteriorating services.

Vanguard has ambitions to bring its disruptive legacy to the bond market. It created roughly a dozen low-cost bond exchange-traded funds for US investors and several others abroad over the 12 months through June 2025. All have low fees in their respective categories, and the actively managed strategies align with Vanguard’s philosophy. They are relatively easy to understand and are conservatively managed.

Vanguard has another opportunity to prove that clients are still its priority. On the surface, its endeavor into the high-fee deal-making world of private assets alongside Wellington and Blackstone looks like a cultural mismatch. So far, the collaboration hasn’t produced anything that’s concerning.

Note: This share class' Parent Pillar rating is analyst-driven, as its Branding Name, Vanguard (Branding Name ID: BN00000AAL), is covered by Morningstar Manager Research.

Performance is evaluated in US Dollar, measured to the end of April 2026.

Short-Term Performance

Over the past 12 months, Vanguard S&P Mid-Cap 400 ETF share class returned 29.4%, outperforming its category index, the Morningstar US Mid TR USD Index (25.7%), and its Morningstar category peers (26.7%). Over the three-year period, it returned 15.2% per year, trailing both the index (16.3% per year) and its Morningstar category peers (15.3% per year).

Long-Term Performance

The fund's five-year annualized return of 7.5% fell short of the benchmark (8.2% per year) but mirrored the Morningstar Category average (7.6% per year). Across the 10-year period, the fund returned 11.2% per year, below the index (12.2% per year) but ahead of its Morningstar Category average (10.4% per year).

Vanguard S&P Mid-Cap 400 ETF's Prospectus Adjusted Expense Ratio is 0.07% per year. It places it in the cheapest quintile of the Morningstar US Fund Mid-Cap Blend Category, where the median fee is 0.83% per year. This cost positioning translates into a Medalist Rating Price Score of 2.2, which reflects its relative price positioning within the category. The Price Score ranges from -2.50 (most expensive) to +2.50 (cheapest), with higher scores indicating better cost competitiveness.