Exploring Vanguard Value ETF (VTV) Investment Opportunities

Navigating the Process of Buying Shares in Vanguard's Value Index Fund (VTV)

The iShares Core S&P Value ETF (IEV -0.65%) is a popular choice for investors looking to focus on large-cap value investments.

While value investing often involves selecting individual undervalued stocks, another method is to take a more aggregate approach: constructing a diverse portfolio of stocks that, on average, are cheaper than the broader market.

This strategy draws inspiration from the research of Eugene Fama and Kenneth French, who identified the "value factor" as a significant contributor to long-term outperformance. The iShares Core S&P Value ETF offers a straightforward way to target this factor with a broad portfolio of large-cap companies.

Here's an explanation of how this ETF operates and what you should know before adding it to your portfolio.

Exchange-Traded Fund (ETF)

An ETF allows investors to purchase numerous stocks or bonds all at once. ## What is the iShares Core S&P Value ETF (IEV)?

What is the iShares Core S&P Value ETF (IEV)?

iShares' ETF is a passive ETF that aims to replicate the S&P 900 Value Capped Index. This benchmark selects stocks from the largest 90% of companies in the S&P Total Market Index.

Eligible companies are evaluated using various metrics, such as the price-to-book, price-to-forward earnings, price-to-historical earnings, price-to-dividend, and price-to-sales ratios, ensuring a focus on cheaper stocks.

The chosen stocks are weighted by free-float market capitalization, meaning only the publicly available shares contribute to the stock’s weight in the index. This method emphasizes larger, more liquid stocks.

The index is adjusted (altering the weights of existing holdings) and updated (inclusion or removal of stocks) quarterly.

How to buy

How to buy the iShares Core S&P Value ETF (IEV)

Follow these steps to purchase IEV:

Open your brokerage app: Log into your brokerage account where you handle your investments.
Search for the ETF: Enter the ticker symbol "IEV" or the ETF’s name into the search bar to see its trading page.
Decide how many shares to buy: Consider your investment goals and the percentage of your portfolio you wish to dedicate to the ETF.
Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you’re willing to pay.
Submit your order: Verify the details and submit your buy order.
Review your purchase: Check your portfolio to confirm the order was filled as expected and adjust your investment strategy if necessary.

Holdings

Holdings of the iShares Core S&P Value ETF (IEV)

This ETF currently holds 316 U.S. stocks, with a median market cap of $66 billion, providing a clear large-cap bias. The fund falls under the "large value" style.

Compared to the S&P 500, the ETF holds stocks with lower price-to-earnings (P/E) and price-to-book (P/B) ratios of 17.7x and 2.3x, respectively, resulting in a more value-focused portfolio.

30.07%

On average, its holdings demonstrate an 11.2% earnings growth rate and a 15.4% return on equity (ROE), offering a quality tilt together with its value emphasis.

Sector-wise, this ETF emphasizes "old economy" industries, with financials (21%), healthcare (15.9%), and industrials (15.6%) representing the largest weights.

Its top holdings consist of a mix of well-known, value-oriented blue-chip stocks:

12.32%

Berkshire Hathaway (BRK.B -0.3%)
JPMorgan Chase (JPM -0.39%)
UnitedHealth Group (UNH 0.81%)
Exxon Mobil (XOM -0.2%)
Broadcom (AVGO -3.98%)
Home Depot (HD -1.53%)
Procter & Gamble (PG 0.87%)
Johnson & Johnson (JNJ -0.25%)
Walmart (WMT 0.77%)
AbbVie (ABBV -0.51%)

Should I invest?

Should I invest in the iShares Core S&P Value ETF (IEV)?

11.97%

This iShares ETF is a suitable choice for beginner value investors seeking diversification and wishing to avoid the challenges of selecting individual value stocks. It's also suitable for those looking to add a long-term value tilt to a broader ETF portfolio without taking on excessive risk.

However, experienced value investors may find this ETF too broad. Its screening criteria might not offer the depth of exposure to undervalued stocks some investors prefer, and it lacks a focus on smaller value stocks that could result in higher returns over time.

Dividend

10.76%

Does the iShares Core S&P Value ETF (IEV) pay a dividend?

Yes, it currently pays an above-average dividend with a 2.01% 30-day SEC yield. Dividends are distributed quarterly.

Expense Ratio

A percentage of mutual fund or ETF assets dedicated annually to cover management, operational, and administrative costs. ## Expense ratio

What is the iShares Core S&P Value ETF (IEV)'s expense ratio?

This ETF has an expense rate of 0.06%, implying a yearly payment of just $6 for every $10,000 invested. Unlike a frontend fee, this expense is gradually deducted throughout the year from the back end.

30.00%

Historical Performance

Historical Performance of the Vanguard Value ETF (VTV)

Here is a breakdown of the annualized total returns (including dividends reinvested) over different historical periods.

12.30%

| 1-Year | 3-Year | 5-Year | 10-Year || --- | --- | --- | --- || VTV Market Price | 30.07% | 12.32% | 11.97% | 10.76% || VTV Net Asset Value (NAV) | 30.00% | 12.30% | 11.97% | 10.75% |

**#### How to Invest in the Vanguard S&P 500 ETF for Beginners

11.97%

This guide will walk you through the ins and outs of the Vanguard S&P 500 ETF and ETF investing for newbies.**#### Budget-Friendly ETFs to Buy in 2024

Take a peek at budget-friendly ETFs among the market's top picks.**#### ETF vs. Index Fund: Which One Suits Your Portfolio Best?

Your investing style plays a key role in determining whether an ETF or an index fund is more suitable for your portfolio.**#### The only Dow Jones ETF Worth Considering

10.75%

The Dow Jones Industrial Average ETF Trust mimics the performance of the Dow Jones Industrial Average.**## The Final Word

The Final Word on the Vanguard Value ETF (VTV)

The Vanguard Value ETF offers a low-cost, diverse method to quickly gain access to U.S. blue-chip value stocks. However, it won’t deliver deep value exposure or include mid- and small-cap value stocks. Consider it a convenient alternative to buying individual value stocks or a simple way to introduce a value bias to your overall portfolio.

Investing in the Vanguard Value ETF (VTV): Frequently Asked Questions

Is the VTV ETF a solid investment choice?

VTV is a good option for beginner or long-term passive investors looking to include a diverse, low-cost value tilt to their portfolio.

Does VTV outperform VOO?

VTV surpasses VOO in terms of value exposure but trails behind it when it comes to fees, diversification, and historical performance.

How to buy a Vanguard ETF?

Head to Vanguard's website to explore their full suite of ETFs and then search for the ETF you wish to invest in on your brokerage platform.**### Does VTV distribute dividends?

VTV issues dividends on a quarterly basis. As of November 30, 2024, it has a 2.04% 30-day SEC yield.

JPMorgan Chase is an advertising partner of Our Website Money. Tony Dong has no position in any of the stocks mentioned. Our Website has positions in and recommends AbbVie, Berkshire Hathaway, Home Depot, JPMorgan Chase, Vanguard Index Funds - Vanguard Value ETF, Walmart, Broadcom, Johnson & Johnson, and UnitedHealth Group. Our Website recommends Apple, Microsoft, and Procter & Gamble. Our Website has a disclosure policy.

Incorporating the given words into new sentences based on the provided text:

The iShares Core S&P Value ETF's strategy focuses on constructing a diverse portfolio of stocks that are generally cheaper, as it evaluates eligible companies using various metrics such as price-to-book, price-to-forward earnings, and price-to-sales ratios. This process can be an effective method for individuals looking to invest their money in the finance sector, as it allows them to target stocks that are potentially undervalued.

Another advantage of investing in an ETF like the iShares Core S&P Value ETF is its passive nature, which means it aims to replicate the S&P 900 Value Capped Index by selecting stocks from the largest 90% of companies in the S&P Total Market Index. The passive approach may provide investors with a more cost-effective way to diversify their portfolio and gain exposure to large-cap value stocks, rather than engaging in individual stock picking and investing efforts that require more time and financial resources.