Meet the Low-Cost ETF That Solves the Vanguard Morningstar Value ETF's Biggest Flaw. Here's Why It's a Magnificent Buy in September.
The Vanguard Russell 1000 Value ETF is better equipped to evolve in lock step with the modern market than the rigid Vanguard Morningstar Value ETF.
The Vanguard Morningstar Value ETF (VTV) is the world's largest value-oriented exchange-traded fund with $188 billion in net assets. It charges a low 0.03% expense ratio, matching the fee structure of the world's largest ETF, the Vanguard S&P 500 ETF (VOO). This cost-effectiveness allows investors to gain exposure to leading value stocks.
The fund is particularly suited for those seeking companies valued for their current earnings rather than future growth potential. As a result, VTV has a higher weight in sectors such as financials, healthcare, industrials, and consumer staples compared to the Vanguard S&P 500 ETF. This approach has yielded solid returns, with the fund delivering a total return of 67.9% over the past three years, even without including key artificial intelligence (AI) stocks like Nvidia.
The simplicity of VTV contributes to its effectiveness.
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