The Vanguard Value ETF (
VTV Quick Quote VTV - Free Report) was launched on 01/26/2004, 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 $101.45 billion, making it the largest ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies usually 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 are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their 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.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 2.13%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 22.20% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Jpmorgan Chase & Co. (
JPM Quick Quote JPM - Free Report) accounts for about 2.90% of total assets, followed by Berkshire Hathaway Inc. ( BRK.B Quick Quote BRK.B - Free Report) and Johnson & Johnson ( JNJ Quick Quote JNJ - Free Report) . Performance and Risk
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 added about 0.11% so far this year and is up about 15.52% in the last one year (as of 03/22/2022). In the past 52-week period, it has traded between $129.29 and $150.33.
The ETF has a beta of 0.95 and standard deviation of 22.78% for the trailing three-year period, making it a medium risk choice in the space. With about 358 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 a great 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 Vanguard High Dividend Yield ETF (
VYM Quick Quote VYM - Free Report) and the iShares Russell 1000 Value ETF ( IWD Quick Quote IWD - Free Report) track a similar index. While Vanguard High Dividend Yield ETF has $43.91 billion in assets, iShares Russell 1000 Value ETF has $58.59 billion. VYM has an expense ratio of 0.06% and IWD charges 0.19%. Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.