A sound investment process and strong management team underpin Vanguard S&P 500 Value ETF's Morningstar Medalist Rating of Silver. The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy merits an Above Average Process Pillar rating. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm a High Parent Pillar rating. People, Process and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Berkshire Hathaway Inc. - Ordinary Shares - Class B

JPMorgan Chase & Co

Exxon Mobil

Johnson & Johnson

UnitedHealth Group

Chevron

Bank of America

Walmart

Home Depot

Procter & Gamble

The fund accurately captures the opportunity set available to its Morningstar Category peers. The fund's sector allocations did not deviate from the category average by more than 7% as of March 2023. However, the fund’s sector allocations changed toward the end of 2022. Compared with its average peer, the fund now overweights technology and consumer cyclicals stocks by 6 and 3 percentage points, respectively, while underweighting healthcare and energy stocks. When calculating stocks' growth scores, the index considers their momentum over the trailing 12 months. Cheaper companies can meet the momentum criteria during value rallies, as happened in 2022 when value stocks were among the bear market's most resilient . The S&P index rebalanced in December 2022, and SPDR Portfolio S&P 500 Value ETF SPYV increased its exposure to newly undervalued sectors like tech and consumer discretionary, while its sister SPDR S&P 500 Growth ETF SPYG sold those stocks. However, such changes in the portfolio should wash out as valuations mean-revert over the long run.

The fund also holds names with higher valuations that don’t qualify as growth stocks. They can temper the fund’s value exposure and provide a modest buffer when value stocks underperform. Companies like JPMorgan Chase JPM and newly undervalued technology stocks such Amazon.com AMZN and Meta Platforms META fit this description. Additionally, the fund shares about one third of its portfolio with SPDR S&P 500 Growth ETF SPYG. 

The fund has historically traded at similar valuations to its average peer. However, the fund’s portfolio comes with higher valuations than peers after its recent rebalance into technology and consumer cyclicals. However, the fund is better diversified than its average peer. The top 10 holdings constitute 21% of the portfolio, which is 10 percentage points lower than the category average as of March 2023.

Like many of its large-value peers, the fund carries persistent sector biases versus the broader market. Compared with the Russell 1000 Index, the fund tilts into financials and industrials stocks while underweighting technology and healthcare stocks, as of March 2023.

Note: The Process Pillar rating and analysis are indirectly assigned by an analyst. When an analyst covers a passively managed vehicle that tracks a particular index, Morningstar associates the Process Pillar rating assigned to that vehicle with the index concerned. Morningstar then maps the Process Pillar associated with a given index to any other uncovered passive strategies that track the same index. This ensures that the analyst’s view is leveraged whenever available and promotes consistency when analyzing passive vehicles associated with a given index.

Above Average

Process

Vanguard S&P 500 Value Index Fund benefits considerably from its equity team, earning it an Above Average People Pillar rating. There are two managers listed on the fund: Kenny Narzikul, Michelle Louie. Overall, management experience is lacking on the team, with only an average of four years spent in the industry. Together, they manage a total of four strategies, with a Gold asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha relative to the category median in aggregate. The team has lacked continuity recently, with Donald Butler leaving in the last two months, detracting from its rating. Even though it is a passive fund, high turnover can still hinder the effectiveness of the investment process. 

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

People

The Vanguard Group retains a High Parent rating. 

Mutual ownership, low costs, and a direct-to-investor playbook have helped spur Vanguard's leadership within the United States. Client service missteps notwithstanding, Vanguard over the past decade has grown its market share of U.S. open-end and exchange-traded fund assets at about a 5% annualized clip. At that rate, Vanguard's portion of the U.S. industry will cross 50% around 2035.

True, some competitors can now match or even undercut Vanguard on fees for broad market exposure. But Vanguard's burgeoning advice business could help it keep or even extend that lead. Through Digital Advisor and Personal Advisor Services, Vanguard has built an increasingly compelling ecosystem of advice for investors with simple to complex needs.

Vanguard is also using its advice business to expand overseas, but that's a work in progress. Of Vanguard's USD 7.6 trillion in global assets under management in March 2023, non-U.S. investors owned less than 10%, a figure that has changed little in recent years. Strategic shifts in China and other markets account for the slow pace, including returning money to institutions that had been layering on fees. Vanguard hopes to recoup that money and more by focusing on individual investors and the advisors who serve them. Provided Vanguard sticks to its playbook, its advantages should translate into success abroad, too.

High

Parent

Vanguard S&P 500 Value ETF

VOOV tracks an index of large- and mid-cap value-style securities from the Committee-selected S&P 500.

The fund tracks an index of large- and mid-cap value-style securities from the committee-selected S&P 500.

iShares S&P Mid-Cap 400 Value ETF

iShares S&P Mid-Cap 400 Growth ETF

iShares S&P Small-Cap 600 Value ETF

iShares S&P Small-Cap 600 Growth ETF

iShares S&P 500 Value ETF

Vanguard S&P Mid-Cap 400 Growth ETF

Vanguard S&P Mid-Cap 400 Value ETF

iShares S&P 500 Growth ETF

Vanguard S&P Small-Cap 600 Growth ETF

Vanguard S&P Small-Cap 600 Value ETF

Vanguard S&P 500 Growth ETF

The style-box updates feature the iShares ETFs since for the mid-quarter updates, the performance data on the benchmarks is not available until the end of every month, and then reported after a day or two delay. In 2021, mid and small-cap value finally beat their growth brethren, but in large-cap, growth continues to be the king.

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Vanguard Russell 1000 Value ETF

Vanguard Value ETF

Honing in on lower expense ratio ETFs in the value space will be an ideal choice.

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Accelerated coronavirus vaccine rollout and rapid economic reopening may lead to faster U.S. economic recovery, making value ETFs an attractive investment option.

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Many investors are quite nervous about the market's current high valuation level in the face of inflation and potential interest rate increases by the Federal Reserve.

VOOV Is For Nervous Nellies (And For You Too)

Several factors are creating a conducive environment for value stocks to outperform their growth counterparts this year.

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Value's lead over growth in 2021 is helping ETFs like the Vanguard S&P 500 Value Index Fund ETF Shares (VOOV), which boasts just a 0.10% expense ratio. VOOV seeks to track the performance of a benchmark index that measures the investment return of large-capitalization value stocks in the United States.

Get S&P 500 Value at a Rock Bottom Price with Vanguard's ‘VOOV'

Accelerated coronavirus vaccine rollout, a fresh round of fiscal stimulus and the economic reopening may lead to faster U.S. economic recovery and present a strong case for outperformance by value ETFs in 2021.

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iShares MSCI USA Value Factor ETF

The potential arrival of a coronavirus vaccine will end the pandemic crisis, keeping the economy recovery intact, and will boost consumer spending and in turn lift value stocks.

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Tesla

With Tesla being added to the S&P 500 index effective December 21, investors might want to consider alternatives to their core index fund holdings. The main pitfall of a market value-weighted index is that it has a momentum tilt created by self-fulfilling trends.

Reduce Tesla And FAANG Exposure By Switching To Value Index Products

Albertsons Companies

Beazer Homes USA

Centene

Ingredion

AT&T

iShares MSCI EAFE Value ETF

Value investing is one of the best ways investors can play the market. Warren Buffet did it -- what's stopping you?

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First Trust NASDAQ Global Auto Index Fund

US Global Jets ETF

SPDR S&P Bank ETF

Industrial Select Sector SPDR Fund

AstraZeneca has restarted British clinical trials of its COVID-19 vaccine. This piece of information may help boost cyclical ETFs all over again.

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U.S. stocks were super steady in August as investors rotated into the beaten-down segments of the year ??? cyclicals.

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iShares Core Moderate Allocation ETF

PIMCO Investment Grade Corporate Bond ETF

SPDR S&P Dividend ETF

Vanguard Consumer Discretionary ETF

Consumer Staples Select Sector SPDR Fund

The S&P 500 posted its worst single-session drop in nearly three months mainly on profit booking. While high-flying tech names were hurt the most, laggards are better-positioned.

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iShares Core U.S. Aggregate Bond ETF

SPDR Dow Jones Industrial Average ETF

SPDR Gold Trust

iShares U.S. Treasury Bond ETF

iShares 7-10 Year Treasury Bond ETF

iShares Russell 2000 ETF

Invesco QQQ

iShares Short Treasury Bond ETF

iShares 1-3 Year Treasury Bond ETF

SPDR S&P 500 ETF Trust

iShares 20+ Year Treasury Bond ETF

Vanguard S&P 500 ETF

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Invesco DB Agriculture Fund

iShares TIPS Bond ETF

Invesco DB US Dollar Index Bullish Fund

Vanguard Real Estate ETF

On Aug 27, the Federal Reserve announced a new strategy to bring back the United States to full employment level and push inflation higher.

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iShares Transportation Average ETF

iShares MSCI China ETF

Vanguard Small-Cap ETF

Vanguard Small-Cap Growth

Vanguard Mid-Cap Value ETF

Vanguard Mid-Cap Growth ETF

This month's leaders shouldn't really surprise anyone, given what we now know about the recovering economy.

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Money managers and individual investors stepped up their buying of shares of value stocks, including banks and manufacturers, this month.

News for Vanguard S&P 500 Value ETF ETF (VOOV)