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Vanguard Value Index Fund ETF Shares

VTV:NYSE

equity ETF | passive | Vanguard | Tracks CRSP US Large Cap Value Index

Market Price

US$198.26 (26 Jan 2026)

+16.54% (YoY)

NAV

US$197.59

+0.34% Premium

Yield

2.05%

-10.87% (YoY)

Expense Ratio

4.00%

-89% vs Avg: 36.00%

Box Set (ETF)

⚡ Executive Summary

📊 The Bottom Line

This ETF tracks the CRSP US Large Cap Value Index, providing exposure to large-capitalization U.S. value stocks. With an ultra-low expense ratio and effective index replication, it serves as a highly efficient vehicle for accessing this market segment. Bull case projects NAV reaching US$233.95 (+18%) while bear case suggests US$162.57 (-18%) over 12-18 months.

⚖️ Risk vs Reward

The underlying value holdings of VTV trade at an aggregate P/E of 20.4x and a P/B of 2.9x, which is generally in line with its benchmark. While value has shown periods of underperformance relative to growth, it typically offers a defensive characteristic during market downturns. The ETF's concentrated allocation to Financials (24.77%) could introduce sector-specific risk, especially with evolving interest rate expectations. However, its broad diversification across over 300 holdings and low expense ratio mitigate some fund-specific risks, positioning it as a core allocation for long-term value investors seeking a balanced risk-reward profile.

🚀 Why VTV Could Soar

• Sustained economic growth could favor cyclical value sectors like financials and industrials, driving earnings and multiple expansion.
• Higher interest rates typically benefit financial institutions, a significant portion of VTV's portfolio, enhancing their profitability and stock performance.
• A rotation from high-growth to value stocks could occur if inflation persists or growth stocks become overvalued, funneling capital into VTV's holdings.

⚠️ What Could Go Wrong

• Economic slowdown or recession could disproportionately impact cyclical value stocks, leading to earnings contractions.
• Unexpected interest rate cuts or a dovish Federal Reserve stance could compress net interest margins for financial companies, hindering a key sector.
• Underperformance of its largest sector allocations, particularly financials or healthcare, could weigh heavily on the ETF's overall returns.

🏢 Fund Overview

What Are You Actually Buying

The U.S. large-cap value market comprises established, financially sound American companies whose stock prices appear undervalued relative to their intrinsic worth, based on metrics like low price-to-earnings or price-to-book ratios.
These companies typically have mature business models, consistent cash flows, and often pay dividends, making them attractive to investors seeking stability and income.
Value stocks tend to exhibit lower volatility compared to growth stocks and can provide diversification benefits, often outperforming during periods of economic recovery or higher inflation.

Market Dynamics & Outlook

As of late 2025, U.S. large-cap value stocks trade at reasonable valuations, with an average P/E of 20.4x and P/B of 2.9x for VTV's holdings.
The sector benefits from expectations of stable economic expansion, which could fuel earnings growth for cyclical industries like financials and industrials.
Potential shifts in monetary policy, particularly sustained higher interest rates, are generally supportive for value-oriented companies, especially those in the financial sector.

🎯 Why This Matters

Understanding the large-cap value market's current positioning is crucial as it offers a blend of stability and potential for appreciation driven by economic fundamentals and sector-specific tailwinds. While valuations are fair, the interest rate environment and sector performance, particularly in financials, will be key determinants of VTV's future returns for investors.

📈 Valuation & Analysis

Historical Performance

YTD

+3.46%

+15.26%

Yearly Growth (3Y)

+13.47%

Yearly Growth (5Y)

+12.59%

Yearly Growth (10Y)

+11.67%

Yearly Growth (Since Inception)

+9.09%

Current Valuation

The Vanguard Value Index Fund ETF Shares (VTV) exhibits a valuation profile typical of large-cap value equities. As of December 31, 2025, the fund's holdings trade at an aggregate price-to-earnings (P/E) ratio of 20.4x and a price-to-book (P/B) ratio of 2.9x. The 30-day SEC yield stands at 2.05%. These metrics indicate that VTV's portfolio is priced broadly in line with its benchmark, the CRSP US Large Cap Value Index, and the broader large-cap value category average. While not in 'bargain' territory, the current valuation suggests fair pricing, potentially offering a more stable entry point compared to growth-oriented segments of the market.

The Bull Case - Upside to

Robust Corporate Earnings in Value Sectors

Medium Probability

If VTV's underlying holdings, particularly in financials and industrials, deliver above-consensus earnings growth of 10-15% over the next 12-18 months, this could drive a 15-20% appreciation in the ETF's NAV.

Interest Rate Stability or Moderate Increases

High Probability

A stable or moderately rising interest rate environment could improve profitability for VTV's significant financial holdings, potentially contributing 5-7% to overall NAV growth.

Rotation from Growth to Value

Medium Probability

Should market sentiment shift significantly from high-growth technology stocks to more mature value companies, VTV could see increased inflows and multiple expansion, leading to a 10-15% upside.

The Bear Case - Downside to

Economic Slowdown or Recession

Low Probability

A significant economic downturn could lead to a 10-15% contraction in corporate earnings for value companies and P/E multiple compression, resulting in a 15-20% decline in VTV's NAV.

Underperformance of Financial Sector

Medium Probability

Given financials comprise 24.77% of VTV's portfolio, any unexpected headwinds to this sector, such as tighter regulation or a sharp decline in loan growth, could negatively impact the ETF's performance by 5-10%.

Sustained Preference for Growth Stocks

Medium Probability

A prolonged period of outperformance by growth stocks, driven by innovation narratives or low interest rates, could see value stocks continue to lag, potentially resulting in a 5-10% underperformance for VTV relative to the broader market.

Risk/Reward Assessment

The risk-reward profile for VTV appears balanced, reflecting its exposure to large-cap U.S. value stocks. On the upside, a continuation of economic expansion and favorable interest rate trends could propel the ETF's NAV towards US$233.95, driven by solid corporate earnings and potential shifts in market leadership favoring value. The diversified nature of the fund's holdings across various value-oriented sectors offers a degree of resilience. However, the concentration in financials introduces a notable sector-specific risk, especially if economic conditions deteriorate or interest rate policies become less favorable. While the passive management and low costs enhance long-term returns, investors should be prepared for potential drawdowns, with a bear-case scenario seeing the NAV fall to US$162.57. For long-term investors seeking broad exposure to the value segment, VTV provides a cost-effective and transparent vehicle, albeit with inherent market and sector-specific volatilities.

Peer Comparison

• VTV offers a highly competitive expense ratio of 0.04%, significantly lower than most peers, translating to substantial cost savings over time. • Its broad diversification with 312 holdings minimizes single-stock risk compared to more concentrated value funds. • VTV's tracking of the CRSP US Large Cap Value Index provides a distinct exposure compared to S&P 500 Value index-tracking funds like IVE and VOOV, which may have slightly different factor tilts. • The fund's large AUM of over US$217 billion ensures excellent liquidity and minimal bid-ask spreads for efficient trading.

Fund	Expense Ratio	AUM (B)	1Y Return	3Y Return	5Y Return	Yield
Vanguard Value Index Fund ETF Shares (VTV) ⭐	4.00%	US$217.8B	15.26%	13.47%	12.59%	2.05%
iShares S&P 500 Value ETF (IVE)	18.00%	US$49.2B	13.01%	15.62%	12.95%	1.57%
Vanguard S&P 500 Value ETF (VOOV)	7.00%	US$6.2B	12.09%	14.50%	12.89%	1.78%

🎯 Why This Matters

The valuation and peer comparison highlight VTV's position as a low-cost, diversified option for large-cap value exposure. While its performance is generally competitive, investors should weigh its specific index methodology against alternatives and remain cognizant of the cyclical nature of value investing. The fund's cost efficiency remains a significant long-term advantage for investors committed to the value factor.

📊 Appendix

Top 10 Holdings (80+ of ETF Value)

#	Ticker	Logo	Name	Sector	Weight
1	JPM	J	JPMorgan Chase & Co.	Financials	3.5%
2	BRK.B	B	Berkshire Hathaway Inc. Class B	Financials	3.3%
3	XOM	E	Exxon Mobil Corp.	Energy	2.1%
4	JNJ	J	Johnson & Johnson	Healthcare	2.1%
5	WMT	W	Walmart Inc.	Consumer Defensive	2.1%
6	ABBV	A	AbbVie Inc.	Healthcare	1.7%
7	BAC	B	Bank of America Corp.	Financials	1.5%
8	HD	T	The Home Depot Inc.	Consumer Cyclical	1.4%
9	PG	P	Procter & Gamble Co.	Consumer Defensive	1.4%
10	MU	M	Micron Technology Inc.	Technology	1.4%

Fund Mechanics

How It Works

The Vanguard Value Index Fund ETF Shares (VTV) employs an indexing investment approach designed to track the performance of the CRSP US Large Cap Value Index. This index measures the investment return of large-capitalization value stocks within the U.S. equity market. The fund utilizes a passively managed, full-replication strategy, aiming to invest all, or substantially all, of its assets in the stocks that comprise the index, holding each stock in approximately the same proportion as its weighting in the index. The CRSP US Large Cap Value Index is constructed using a multi-factor model to classify and weigh value securities. This model considers metrics such as book-to-price, forward earnings-to-price, historic earnings-to-price, dividend-to-price ratio, and sales-to-price ratio. Securities are scored and ranked based on a composite of these five factors. The index undergoes a full review on a quarterly basis to maintain its value characteristics and alignment with market dynamics, helping to minimize turnover.

Holdings Breakdown

Number of Holdings

312

Top 10 Concentration

2053.0%

Top 20 Concentration

3209.0%

Turnover Rate

880%

Category	Weight	Description
Financial Services	24.8%
Healthcare	16.0%
Industrials	13.3%
Technology	11.1%
Consumer Defensive	9.3%
Energy	6.6%
Utilities	5.1%
Consumer Cyclical	4.6%
Communication Services	3.6%
Basic Materials	2.9%
Real Estate	2.7%

Cost Efficiency

Expense Ratio

4.00%

Median Bid-Ask Spread

1.000%

Metric	1 Year	3 Year	5 Year
Tracking Error	N/A	N/A	N/A
Tracking Difference	-4.00%	2.00%	0.00%

Expense Ratio History

Year	Expense Ratio
2025	4.00%

Performance History

Year	ETF Return	Benchmark Return	Tracking Diff	Volatility	Max Drawdown	Sharpe Ratio
2025	15.26%	15.31%	-0.05%	N/A	N/A	N/A
2024	15.94%	16.00%	-0.06%	N/A	N/A	N/A
2023	9.32%	9.17%	0.15%	N/A	N/A	N/A
2022	-2.04%	-2.01%	-0.03%	N/A	N/A	N/A
2021	26.41%	26.51%	-0.10%	N/A	N/A	N/A
2020	2.29%	2.26%	0.03%	N/A	N/A	N/A
2019	25.83%	25.85%	-0.02%	N/A	N/A	N/A
2018	-5.45%	-5.40%	-0.05%	N/A	N/A	N/A
2017	17.14%	17.16%	-0.02%	N/A	N/A	N/A
2016	16.95%	16.93%	0.02%	N/A	N/A	N/A
2015	-0.92%	-0.86%	-0.06%	N/A	N/A	N/A
2014	13.18%	13.29%	-0.11%	N/A	N/A	N/A
2013	33.11%	33.15%	-0.04%	N/A	N/A	N/A
2012	15.15%	15.23%	-0.08%	N/A	N/A	N/A
2011	1.12%	1.24%	-0.12%	N/A	N/A	N/A
2010	14.48%	14.54%	-0.06%	N/A	N/A	N/A

Annualized Return Since Inception

9.09%

Detailed Peer Comparison

Ticker	Name	Issuer	Exp Ratio	AUM (B)	1Y	3Y	5Y	Yield	StdDev 3Y	Sharpe 3Y	Spread
VTV ⭐	Vanguard Value Index Fund ETF Shares	Vanguard	4.00%	US$217.8B	15.3%	13.5%	12.6%	2.05%	12.22%	0.57	1.000%
IVE	iShares S&P 500 Value ETF	BlackRock	18.00%	US$49.2B	13.0%	15.6%	12.9%	1.57%	N/A	N/A	N/A
VOOV	Vanguard S&P 500 Value ETF	Vanguard	7.00%	US$6.2B	12.1%	14.5%	12.9%	1.78%	N/A	N/A	N/A
Category Average			36.00%	—	14.8%	14.3%	11.9%	2.46%	—	N/A	—

Risk Metrics

Beta

0.76

Alpha

-4.20

R-Squared

66.29

Standard Deviation

1 Year	3 Years	5 Years	10 Years
N/A	12.22%	N/A	N/A

Sharpe Ratio

1Y	3Y	5Y	10Y
N/A	0.57	N/A	N/A

Sortino Ratio

3 Years	5 Years
N/A	N/A

Maximum Drawdown

1 Year	3 Years	5 Years	Since Inception
N/A	-14.43%	N/A	N/A

Upside Capture

6800.0%

Downside Capture

9100.0%

Correlations

S&P 500

0.68

Liquidity & Trading

Volume

Avg Daily Shares

4,183,226

Avg Daily Dollar Volume

US$829.4M

Trend

stable

Bid-Ask Spread

Metric	Value
Median (Percent)	1.000%
Median (Dollar)	N/A
During Hours	N/A
At Close	N/A
Volatility	low

Premium/Discount to NAV

Metric	Value
Current	33.90%
30-Day Average	N/A
1-Year Average	N/A
Standard Deviation	N/A
Max Premium (1Y)	N/A
Max Discount (1Y)	N/A

Creation/Redemption Activity

Trend

stable

Net Flows

Period	Net Flow
1 Month	US$1380.0M
1 Quarter	US$4120.0M
1 Year	US$11930.0M

⚠️ Disclaimer: This ETF research report is for informational and educational purposes only. It does not constitute investment advice, a recommendation, or an offer to buy or sell securities. EC² Invest is not a registered investment advisor. All data is sourced from public sources and may contain errors. Past performance does not guarantee future results. ETF investing involves risk, including possible loss of principal. Always conduct your own research and consult with a qualified financial professional before making investment decisions.