Vanguard Value Fund Demonstrates the Wind Is Shifting

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.

The Vanguard Value ETF (VTV) is a low-cost flagship for value investing that is up nearly 9% over the last three months.

With a spread of more than 300 holdings, this exchange-traded fund offers a simple way to employ a value investing strategy without having to carefully select individual holdings. VTV covers a broad segment of the market and invests in all the big names in value standbys, thus creating a convenient investment vehicle that doesn’t rely too strongly on individual company performance.

By value investing, I mean that the stocks and companies included in this fund generally have lower prices as compared to their book value than others. This is often because they are expected to see less growth in their bottom line, but it can also indicate that their prices are too low and will rise.

An October 2017 article found on CNBC had an interesting insight about the performance of growth stocks versus value-oriented ones so far this year. To summarize, growth stocks began to significantly outperform value stocks after the 2016 presidential election on optimism that the incoming Trump administration would be good for business and the economy. However, value stocks began to make something of a rebound a few months back as the high valuations of surging growth stocks began to be more seriously questioned by investors.

You can see something of this change in the winds by looking at the performance chart of VTV below. The fund traded mildly upward through the first nine months of the year before suddenly accelerating in September. While the fund is up close to 15% in the past 12 months, roughly 9% of that gain has come in the last 90 days.

Exclusive  Precious Metals Offer Alternative to Diversify from Equities

For comparison, though, the S&P 500 has returned 20.55% year to date and VTV’s sister ETF, the Vanguard Growth ETF (VUG), is up 25.67% year to date. VTV carries a very low 0.06% expense ratio and pays a dividend of 2.36%. Assets managed total $63.6 billion.

The most prominent sectors in this fund are financials, technology, health care and industrials. The top ten holdings comprise 27.5% of assets and include such stalwarts as Microsoft Corp. (MSFT), 5.4%; Johnson & Johnson (JNJ), 3.1%; Berkshire Hathaway Inc. (BRK-B), 3.1%; JPMorgan Chase & Co. (JPM), 3.0%; and Exxon Mobil Corp. (XOM), 3.0%.

If you are looking for a way to invest in some of the biggest and most stable American companies on the market, Vanguard Value ETF (VTV) may be a useful instrument to consider.

Like This Article?
Now Get Jim's FREE Special Report:
The Top 11 Dividend ETFs to
Buy Right Now

Get up to 5X the yields of traditional income plays.

Get Access to the Report, 100% FREE


img
previous article

Investing expert Jim Woods shares some personal insights about how to invest and the successful mindset.

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

LEARN MORE HERE

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

LEARN MORE HERE

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

LEARN MORE HERE

Mike Turner

Mike Turner’s financial, mathematical, computer science and engineering background serves as the foundation for his disciplined, rules-based approach to trading. Mike’s three services include:

Product Details

LEARN MORE HERE

Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. Since 2010, Hilary's financial publications have provided stock analysis and investment advice to her subscribers:

Product Details

LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

LEARN MORE HERE