This week’s ETF Talk features Vanguard Value ETF (VTV), yet another low-expense-ratio Vanguard exchange-traded fund (ETF). VTV’s $16.3 billion under management shows the fund is almost as popular as its growth-focused sibling, Vanguard Growth ETF (VUG), which has $16.4 billion under management. But VTV’s low 0.09% expense ratio, the same as VUG, is 92% below the average for its category of investments.
VTV, unlike VUG and its large-cap growth fund strategy, pursues a large-cap value investing approach that tracks the performance of an index that measures the investment return of large-capitalization value stocks. A value stock is one that investors believe is undervalued by the market.
Vanguard Value ETF’s price has increased by 11.62% during 2014, and its 2.19% yield provides additional income to investors.
VTV’s largest sector holdings are financial services, 21.84%; healthcare, 15.31%; and industrials, technology and energy, each with slightly more than 11% of the fund’s assets. This fund’s top 10 holdings make up 26.73% of its total assets. The list of its top individual holdings includes Exxon Mobil Corporation (XOM), 3.95%; Microsoft Corporation (MSFT), 3.39%; Johnson & Johnson (JNJ), 2.96%; Wells Fargo & Company (WFC), 2.67%; and General Electric Company, 2.53%.
Nearly any ETF provider is likely to offer a value-oriented fund, but the low expense ratio of Vanguard’s version increases the appeal of this ETF. If you’re interested in value investing, look into Vanguard Value ETF (VTV).
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In case you missed it, I encourage you to read my e-letter column from last week about Vanguard’s growth-oriented ETF, VUG. I also invite you to comment in the space provided below.