We have qualitatively reviewed this strategy and reaffirmed its Above Average Process and People ratings. Vanguard Value constructs a well-diversified, market-cap-weighted basket of U.S. value stocks at a rock-bottom fee, a recipe for success over the long run. The following text is from April 10, 2023. 

Vanguard Value constructs a well-diversified, market-cap-weighted basket of U.S. value stocks at a low cost. 

The fund replicates the CRSP US Large Cap Value Index, which selects cheaper large-cap stocks and weights them by their market cap. These companies have modest valuations that reflect their dimmer outlooks. However, performance relative to expectations is what counts, and these firms’ meager valuations are a lower hurdle to deliver solid returns.

U.S. large-cap stocks attract widespread attention, such that new information is quickly reflected in prices. Market-cap-weighting is a sensible approach here. It harnesses the market's collective wisdom of each stock's relative value.

The fund accurately mimics the contours of its average peer, which emphasizes the fund's minuscule fee in driving Morningstar Category-relative outperformance over the long run. The fund's sector allocations did not deviate by more than 5% from the category average as of February 2023. The fund also trades at a similar average valuation as its typical peer. On the other hand, the fund has a lower average market cap than the category average because of its broad reach, which improves overall diversification.

The fund is well diversified compared with its average peer. Its top 10 holdings represent only 21% of the portfolio, while the category average is 31%, so it has less stock-specific risk.

Analyst Rating

Cheap and well-diversified value exposure.

Associate Analyst

Mo'ath Almahasneh

Berkshire Hathaway Inc. - Ordinary Shares - Class B

Broadcom

JPMorgan Chase & Co

Exxon Mobil

UnitedHealth Group

Procter & Gamble

Home Depot

Johnson & Johnson

Merck

AbbVie

We have qualitatively reviewed this strategy and reaffirmed its Above Average Process rating. The following text is from April 10, 2023.

The CRSP US Large-Cap Value Index constructs a market-cap weighted portfolio that channels the market’s collective wisdom and diversifies risk effectively. It earns an Above Average Process Pillar rating.

Above Average

Process

We have qualitatively reviewed this strategy and reaffirmed its Above Average People rating. The following text is from April 10, 2023.

Vanguard Equity Index Group boasts seasoned managers and a dedicated supporting staff that's well-equipped to provide tight index tracking, earning it an Above Average rating.

 Gerard O'Reilly and Walter Nejman comanage this strategy. O'Reilly, a principal at Vanguard, has been with the firm since 1992. Nejman joined him as a comanager in 2016 and started working at the firm in 2005.

The team's large supporting cast features a global team of dedicated personnel and sophisticated, scalable technology that help reduce managers' workload.

The managers are responsible for the fund's trading, providing more portfolio insights than a stand-alone trader. Vanguard frequently rotates its managers to promote breadth and depth across the team. Its independent risk management team works closely with the managers to monitor trades and review any potential issues. Managers' compensation is tied to performance using a combination of tracking error and excess return metrics, which aligns their interests with investors'.

People

As The Vanguard Group settles on new senior leadership, it retains a High Parent rating.

Vanguard announced current CEO Tim Buckley will step down by the end of the year, marking an end to his 33 years at the firm. Historically, Vanguard has pronounced CEO retirements while simultaneously signaling who (from inside the firm) would take over. In this instance, Vanguard’s board said it will evaluate internal and external candidates in the coming months to find its next, and fifth, leader, though it also promoted CIO Greg Davis to president.

Vanguard flourished in several respects under Buckley’s leadership. Assets under management have grown by two thirds over his six years at the helm, while its asset-weighted average US fund fee ratcheted lower to 0.08% at the end of 2023. Vanguard further refined its advice business through its low-cost Digital Advisor platform and more holistic Vanguard Personal Advisor Services, and it debuted promising investment options.

Vanguard has had its share of challenges under Buckley, too. Growing its business outside the US has proved difficult, and ex US investors account for less than 10% of AUM. Between 2019 and 2023, Vanguard’s efforts to build its China business underwent dramatic shifts, with the firm ultimately abandoning plans to launch low-cost index funds there. It also ended a partnership with Ant Financial to provide advisory services to retail investors. Inside the US, customer service issues have continued to be a problem, and some of Vanguard’s newer offers, such as margin loans, seem a departure from a more-conservative approach to investing.

Vanguard retains an investor-friendly culture at its core that’s burnished by a commitment to low costs and supported by its unique mutual ownership structure and direct-to-investor playbook.

High

Parent

Vanguard Value ETF

VTV tracks the CRSP US Large Cap Value Index. The index selects stocks from the top 85% of market capitalization based on multiple value factors.

The fund tracks an index of large-cap stocks in the US. Holdings are selected and weighed based on five value factors.

For the Vanguard Value ETF, we found that the implied analyst target price for the ETF based upon its underlying holdings is $122.51 per unit.

Look Under The Hood: The Vanguard Value ETF Has 11% Upside

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For the Vanguard Value ETF, we found that the implied analyst target price for the ETF based upon its underlying holdings is $121.87 per unit.

How The Parts Add Up: The Vanguard Value ETF Targets $122

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For the Vanguard Value ETF, we found that the implied analyst target price for the ETF based upon its underlying holdings is $121.13 per unit.

Add Up The Parts: The Vanguard Value ETF Could Be Worth $121

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For the Vanguard Value ETF, we found that the implied analyst target price for the ETF based upon its underlying holdings is $120.14 per unit.

The Vanguard Value ETF's Holdings Imply 10% Gain Potential

For the Vanguard Value ETF, we found that the implied analyst target price for the ETF based upon its underlying holdings is $120.37 per unit.

Analysts Forecast 12% Upside For The Holdings Of The Vanguard Value ETF

News for Vanguard Value ETF ETF (VTV)