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Should Vanguard Value ETF (VTV) Be on Your Investing Radar?
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The Vanguard Value ETF (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 $101.10 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 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. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
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 2.58%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Healthcare sector--about 21.40% of the portfolio. Financials and Industrials round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc. (BRK.B - Free Report) accounts for about 3.11% of total assets, followed by Unitedhealth Group Inc. (UNH - Free Report) and Johnson & Johnson (JNJ - Free Report) .
The top 10 holdings account for about 17.36% of total assets under management.
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 lost about -1.07% so far this year and is down about -4.30% in the last one year (as of 04/05/2023). In the past 52-week period, it has traded between $123.48 and $150.80.
The ETF has a beta of 0.89 and standard deviation of 17.91% for the trailing three-year period, making it a medium risk choice in the space. With about 340 holdings, it effectively diversifies company-specific risk.
Alternatives
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 - Free Report) and the iShares Russell 1000 Value ETF (IWD - Free Report) track a similar index. While Vanguard High Dividend Yield ETF has $48.51 billion in assets, iShares Russell 1000 Value ETF has $50.43 billion. VYM has an expense ratio of 0.06% and IWD charges 0.18%.
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.
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Should Vanguard Value ETF (VTV) Be on Your Investing Radar?
The Vanguard Value ETF (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 $101.10 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 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. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
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 2.58%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Healthcare sector--about 21.40% of the portfolio. Financials and Industrials round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc. (BRK.B - Free Report) accounts for about 3.11% of total assets, followed by Unitedhealth Group Inc. (UNH - Free Report) and Johnson & Johnson (JNJ - Free Report) .
The top 10 holdings account for about 17.36% of total assets under management.
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 lost about -1.07% so far this year and is down about -4.30% in the last one year (as of 04/05/2023). In the past 52-week period, it has traded between $123.48 and $150.80.
The ETF has a beta of 0.89 and standard deviation of 17.91% for the trailing three-year period, making it a medium risk choice in the space. With about 340 holdings, it effectively diversifies company-specific risk.
Alternatives
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 - Free Report) and the iShares Russell 1000 Value ETF (IWD - Free Report) track a similar index. While Vanguard High Dividend Yield ETF has $48.51 billion in assets, iShares Russell 1000 Value ETF has $50.43 billion. VYM has an expense ratio of 0.06% and IWD charges 0.18%.
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.