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Launched on 09/09/2010, the Vanguard S&P 500 Value ETF (VOOV) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $2.95 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.98%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Berkshire Hathaway Inc. Accounts for about 3.04% of total assets, followed by Johnson & Johnson (JNJ) and Procter & Gamble Co. (PG).
The top 10 holdings account for about 11.97% of total assets under management.
Performance and Risk
VOOV seeks to match the performance of the S&P 500 Value Index before fees and expenses. The S&P 500 Value Index measures the performance of large capitalization value stocks.
The ETF has lost about -4.98% so far this year and it's up approximately 1.54% in the last one year (as of 05/09/2022). In the past 52-week period, it has traded between $138.92 and $153.78.
The ETF has a beta of 0.94 and standard deviation of 23.18% for the trailing three-year period, making it a medium risk choice in the space. With about 452 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard S&P 500 Value ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOOV is a great option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.