Should Vanguard Value ETF (VTV) Be on Your Investing Radar?
The fund is sponsored by Vanguard. It has amassed assets over $134.51 billion, making it the largest ETFs attempting to match the Large Cap Value segment of the US equity market.
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.04%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.27%.
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 25% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc (BRK/B) accounts for about 3.45% of total assets, followed by Jpmorgan Chase & Co (JPM) and Exxon Mobil Corp (XOM).
The top 10 holdings account for about 8.92% of total assets under management.
VTV seeks to match the performance of the CRSP U.S. Large Cap Value Index before fees and expenses. The CRSP U.S. Large Cap Value Index measures the investment return of large-capitalization value stocks.
The ETF has gained about 2.84% so far this year and is up roughly 8.46% in the last one year (as of 05/19/2025). In the past 52-week period, it has traded between $153.67 and $181.87.
The ETF has a beta of 0.82 and standard deviation of 14.66% for the trailing three-year period, making it a medium risk choice in the space. With about 342 holdings, it effectively diversifies company-specific risk.
Vanguard Value ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VTV is an excellent option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD) and the Schwab U.S. Dividend Equity ETF (SCHD) track a similar index. While iShares Russell 1000 Value ETF has $61.94 billion in assets, Schwab U.S. Dividend Equity ETF has $68.98 billion. IWD has an expense ratio of 0.19% and SCHD charges 0.06%.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Vanguard Value ETF (VTV): ETF Research Reports
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
Schwab U.S. Dividend Equity ETF (SCHD): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
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