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Should Vanguard Value ETF (VTV) Be on Your Investing Radar?
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If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the Vanguard Value ETF (VTV - Free Report) , a passively managed exchange traded fund launched on 01/26/2004.
The fund is sponsored by Vanguard. It has amassed assets over $111.17 billion, making it the largest ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 2.34%.
Sector Exposure and Top Holdings
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 22.30% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc (BRK/B) accounts for about 3.78% of total assets, followed by Unitedhealth Group Inc (UNH - Free Report) and Jpmorgan Chase & Co (JPM - Free Report) .
The top 10 holdings account for about 11.71% 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 added about 5.12% so far this year and it's up approximately 13.37% in the last one year (as of 03/05/2024). In the past 52-week period, it has traded between $131.82 and $157.15.
The ETF has a beta of 0.89 and standard deviation of 14.36% 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.
Alternatives
Vanguard Value ETF holds a Zacks ETF Rank of 2 (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 Schwab U.S. Dividend Equity ETF (SCHD - Free Report) and the iShares Russell 1000 Value ETF (IWD - Free Report) track a similar index. While Schwab U.S. Dividend Equity ETF has $53.93 billion in assets, iShares Russell 1000 Value ETF has $54.14 billion. SCHD has an expense ratio of 0.06% and IWD charges 0.19%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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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Should Vanguard Value ETF (VTV) Be on Your Investing Radar?
If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the Vanguard Value ETF (VTV - Free Report) , a passively managed exchange traded fund launched on 01/26/2004.
The fund is sponsored by Vanguard. It has amassed assets over $111.17 billion, making it the largest ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 2.34%.
Sector Exposure and Top Holdings
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 22.30% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc (BRK/B) accounts for about 3.78% of total assets, followed by Unitedhealth Group Inc (UNH - Free Report) and Jpmorgan Chase & Co (JPM - Free Report) .
The top 10 holdings account for about 11.71% 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 added about 5.12% so far this year and it's up approximately 13.37% in the last one year (as of 03/05/2024). In the past 52-week period, it has traded between $131.82 and $157.15.
The ETF has a beta of 0.89 and standard deviation of 14.36% 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.
Alternatives
Vanguard Value ETF holds a Zacks ETF Rank of 2 (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 Schwab U.S. Dividend Equity ETF (SCHD - Free Report) and the iShares Russell 1000 Value ETF (IWD - Free Report) track a similar index. While Schwab U.S. Dividend Equity ETF has $53.93 billion in assets, iShares Russell 1000 Value ETF has $54.14 billion. SCHD has an expense ratio of 0.06% and IWD charges 0.19%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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.