For investors seeking momentum, Vanguard Small-Cap Value ETF VBR is probably on the radar. The fund just hit a 52-week high and is up 33% from its 52-week low price of $148.75/share. 

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:

VBR in Focus

Vanguard Small-Cap Value ETF offers exposure to value stocks in the small-cap space. It has key holdings in industrials, financials and consumer discretionary sectors. The product charges 7 bps in annual fees (see: all the Small Cap Value ETFs here).

Why the Move?

The small-cap corner segment of the broader stock market has been an area to watch lately, given the ongoing market rotation triggered by growing expectations of Fed rate cuts in September. A cut in interest rates would be a positive for small-cap stocks, which rely heavily on debt financing and consumer spending. The pint-sized companies help small businesses to expand their operations easily, resulting in increased profitability. This, in turn, stimulates economic growth. 

Small-cap stocks generally lead the way higher on improving American economic health as these are closely tied to the U.S. economy and generate most of their revenues from the domestic market.

More Gains Ahead?

Currently, VBR has a Zacks ETF Rank #3 (Hold). Therefore, it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank. So, there is definitely some promise for those who want to ride this surging ETF a little further.

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Vanguard Small-Cap Value ETF (VBR): ETF Research Reports

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