Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Vanguard S&P 500 Value ETF (VOOV Quick QuoteVOOV - Free Report) is a passively managed exchange traded fund launched on 09/09/2010.

The fund is sponsored by Vanguard. It has amassed assets over $5.42 billion, making it one of the larger 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. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

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.

Costs

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 0.10%, 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 25.20% of the portfolio. Healthcare and Industrials round out the top three.

Looking at individual holdings, Berkshire Hathaway Inc (BRK/B) accounts for about 3.96% of total assets, followed by Jpmorgan Chase & Co (JPM Quick QuoteJPM - Free Report) and Exxon Mobil Corp (XOM Quick QuoteXOM - Free Report) .

The top 10 holdings account for about 12.71% 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 gained about 17.20% so far this year and it's up approximately 22.41% in the last one year (as of 12/10/2024). In the past 52-week period, it has traded between $162.67 and $199.29.

The ETF has a beta of 0.92 and standard deviation of 14.67% for the trailing three-year period, making it a medium risk choice in the space. With about 443 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard S&P 500 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, 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 Schwab U.S. Dividend Equity ETF (SCHD Quick QuoteSCHD - Free Report) and the Vanguard Value ETF (VTV Quick QuoteVTV - Free Report) track a similar index. While Schwab U.S. Dividend Equity ETF has $66.84 billion in assets, Vanguard Value ETF has $132.46 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.

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.