Is VTV a Smart Buy for Long-Term Investors?

Published: Monday, September 8, 2025 at 11:52 am

Vanguard Value Index Fund ETF: A Look at Diversification and Value Stocks

Diversification is a cornerstone of sound investment strategy, and exchange-traded funds (ETFs) offer a convenient way to achieve it. The Vanguard Value Index Fund ETF (VTV) is one such fund, specifically designed to provide exposure to large-cap value stocks.

The VTV ETF tracks the CRSP US Large Cap Value Index, offering investors a broad stake in a collection of value-oriented companies. It is passively managed, resulting in a low expense ratio of 0.04%, significantly lower than the average for similar funds. The fund also boasts a dividend yield of 2.2%, surpassing the S&P 500's yield. This allows investors to reinvest dividends and potentially accumulate more shares.

The VTV ETF has shown solid performance, with an 8.2% increase so far this year, outperforming the Dow Jones Industrial Average. Including dividend payouts, the total return for 2025 is 9.5%. The fund holds stakes in 323 stocks, diversified across several sectors. Financial services holds the largest weighting, followed by tech stocks, healthcare, and industrials. No single holding accounts for more than 4% of the fund, providing a degree of protection against the underperformance of any single stock.

Historically, the VTV ETF has delivered strong returns. Over the past ten years, it has provided 11.5% annual returns, and 14% over the last five years.

BNN's Perspective:

The VTV ETF presents a compelling option for investors seeking exposure to value stocks and diversification. Its low expense ratio and solid performance are attractive features. However, a balanced portfolio should consider including growth stocks or a growth-focused ETF to potentially enhance overall returns. A diversified approach, rather than concentrating solely on value stocks, is generally advisable for long-term investment success.

Keywords: Vanguard Value Index Fund ETF, VTV, ETFs, value stocks, diversification, CRSP US Large Cap Value Index, expense ratio, dividend yield, large-cap stocks, investment strategy, financial services, tech stocks, healthcare, industrials, portfolio

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