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Should Vanguard S&P 500 Value ETF (VOOV) Be on Your Investing Radar?
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The Vanguard S&P 500 Value ETF (VOOV - Free Report) was launched on 09/09/2010, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $2.65 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies 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.
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. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.92%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 20.70% of the portfolio. Healthcare and Information Technology round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc. (BRK.B - Free Report) accounts for about 2.97% of total assets, followed by Jpmorgan Chase & Co. (JPM - Free Report) and Bank Of America Corp. (BAC - Free Report) .
The top 10 holdings account for about 15.22% of total assets under management.
Performance and Risk
VOOV seeks to match the performance of the S&P 500 Value Index before fees and expenses. The S&P 500 Value Index measures the performance of large capitalization value stocks.
The ETF has lost about -3.39% so far this year and was up about 15.26% in the last one year (as of 03/07/2022). In the past 52-week period, it has traded between $134.09 and $153.78.
The ETF has a beta of 0.97 and standard deviation of 22.86% for the trailing three-year period, making it a medium risk choice in the space. With about 434 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard S&P 500 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, VOOV 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 - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $56.65 billion in assets, Vanguard Value ETF has $93.57 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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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Should Vanguard S&P 500 Value ETF (VOOV) Be on Your Investing Radar?
The Vanguard S&P 500 Value ETF (VOOV - Free Report) was launched on 09/09/2010, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $2.65 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies 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.
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. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.92%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 20.70% of the portfolio. Healthcare and Information Technology round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc. (BRK.B - Free Report) accounts for about 2.97% of total assets, followed by Jpmorgan Chase & Co. (JPM - Free Report) and Bank Of America Corp. (BAC - Free Report) .
The top 10 holdings account for about 15.22% of total assets under management.
Performance and Risk
VOOV seeks to match the performance of the S&P 500 Value Index before fees and expenses. The S&P 500 Value Index measures the performance of large capitalization value stocks.
The ETF has lost about -3.39% so far this year and was up about 15.26% in the last one year (as of 03/07/2022). In the past 52-week period, it has traded between $134.09 and $153.78.
The ETF has a beta of 0.97 and standard deviation of 22.86% for the trailing three-year period, making it a medium risk choice in the space. With about 434 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard S&P 500 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, VOOV 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 - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $56.65 billion in assets, Vanguard Value ETF has $93.57 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.