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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 $116.76 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 fall in the large cap category tend to 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.
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 2.44%.
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 22.20% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc (BRK/B) accounts for about 3.54% of total assets, followed by Broadcom Inc (AVGO - Free Report) and Jpmorgan Chase & Co (JPM - 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 9.77% so far this year and it's up approximately 17.54% in the last one year (as of 07/11/2024). In the past 52-week period, it has traded between $131.82 and $163.65.
The ETF has a beta of 0.88 and standard deviation of 14.07% 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 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VTV is an outstanding 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 $54.77 billion in assets, iShares Russell 1000 Value ETF has $56.03 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 $116.76 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 fall in the large cap category tend to 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.
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 2.44%.
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 22.20% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc (BRK/B) accounts for about 3.54% of total assets, followed by Broadcom Inc (AVGO - Free Report) and Jpmorgan Chase & Co (JPM - 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 9.77% so far this year and it's up approximately 17.54% in the last one year (as of 07/11/2024). In the past 52-week period, it has traded between $131.82 and $163.65.
The ETF has a beta of 0.88 and standard deviation of 14.07% 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 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VTV is an outstanding 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 $54.77 billion in assets, iShares Russell 1000 Value ETF has $56.03 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.