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Launched on 09/22/2010, the Vanguard Russell 1000 Value ETF (VONV) 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 $7.24 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Investors should also pay attention to an ETF’s expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.67%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector–about 21.10% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc. (BRK.B) accounts for about 2.54% of total assets, followed by Jpmorgan Chase & Co. (JPM) and Johnson & Johnson (JNJ).
Performance and Risk
VONV seeks to match the performance of the Russell 1000 Value Index before fees and expenses. The Russell 1000 Value Index measures the performance of large-capitalization value stocks in the United States.
The ETF has added about 0% so far this year and is up about 25.14% in the last one year (as of 01/03/2022). In the past 52-week period, it has traded between $59.19 and $73.74.
The ETF has a beta of 1.02 and standard deviation of 23.11% for the trailing three-year period, making it a medium risk choice in the space. With about 851 holdings, it effectively diversifies company-specific risk.
Vanguard Russell 1000 Value ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VONV is an excellent 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.
The iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $60.03 billion in assets, Vanguard Value ETF has $92.23 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Vanguard Russell 1000 Value ETF (VONV): ETF Research Reports
JPMorgan Chase & Co. (JPM): Free Stock Analysis Report
Johnson & Johnson (JNJ): Free Stock Analysis Report
Berkshire Hathaway Inc. (BRK.B): Free Stock Analysis Report
Vanguard Value ETF (VTV): ETF Research Reports
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
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Zacks Investment Research