1. What Exactly Does Vanguard Value ETF Invest In?
The Vanguard Value ETF (NYSE ARCA: VTV) seeks to track the performance of the CRSP US Large Cap Value Index.
In simple terms, the ETF invests in large-cap U.S. companies that are considered attractively valued relative to their underlying fundamentals. These are generally mature businesses with established market positions, stable cash flows, and proven profitability records.
Some of the characteristics commonly associated with value stocks include:
- Lower price-to-earnings ratios
- Lower price-to-book ratios
- Stable cash flows
- Established business models
- Consistent profitability
Unlike growth companies that typically reinvest a large portion of their earnings to fuel expansion, value companies often return excess capital to shareholders through dividends and share buybacks.
As at the end of 2025, a single unit of the Vanguard Value ETF provides investors with exposure to 309 U.S.-listed companies across a wide range of industries, making it a convenient way to gain diversified exposure to the value segment of the U.S. equity market.
2. How Diversified Is The ETF?
One of the key attractions of the Vanguard Value ETF is its broad diversification.
The ETF’s sector allocation as at the end of 2025 is as follows:
- Financials – 20.5%
- Industrials – 16.0%
- Information Technology – 13.4%
- Health Care – 13.1%
- Consumer Discretionary – 8.1%
- Consumer Staples – 7.7%
- Energy – 7.3%
- Utilities – 5.3%
- Communication Services – 3.5%
- Real Estate – 2.7%
- Materials – 2.4%
While the Financials sector carries the highest weightage, no single sector dominates the portfolio excessively. This helps reduce concentration risk and provides exposure to various segments of the U.S. economy.
At the same time, the ETF’s holdings span across more than 300 companies, helping to minimise company-specific risk should any individual business encounter operational or financial challenges.
3. What Are Some of the ETF’s Largest Holdings?
The Vanguard Value ETF’s top 10 holdings account for approximately 22% of its portfolio, which means that the remaining 78% is spread across nearly 300 other companies.
Its largest holdings as at the end of 2025 are:
i. Micron Technology Inc. (NASDAQ: MU) (4.2%) – Micron designs and manufactures memory chips and storage solutions used in smartphones, personal computers, data centres, artificial intelligence systems, and automobiles.
ii. JPMorgan Chase & Co (NYSE: JPM) (2.9%) – One of the world’s largest banking institutions, JPMorgan provides banking, lending, investment, and wealth management services to individuals, businesses, and governments globally.
iii. Berkshire Hathaway Inc. Class B (NYSE: BRK.B) (2.8%) – Berkshire Hathaway is a diversified conglomerate that owns and invests in businesses spanning insurance, railroads, energy, manufacturing, retail, and publicly listed companies.
iv. Exxon Mobil Corporation (NYSE: XOM) (2.31%) – Exxon Mobil is one of the world’s largest integrated energy companies involved in the exploration, production, refining, and distribution of oil and natural gas products.
v. Johnson & Johnson (NYSE: JNJ) (2.1%) – Johnson & Johnson develops pharmaceutical products and medical technologies used to treat a wide range of medical conditions worldwide.
vi. Walmart Inc. (NASDAQ: WMT) (1.93%) – Walmart operates one of the largest retail networks globally, selling groceries, household products, apparel, and consumer goods through both physical stores and e-commerce platforms.
vii. Intel Corporation (NASDAQ: INTC) (1.75%) – Intel develops semiconductor chips and computing technologies used in personal computers, servers, and other electronic devices.
viii. Cisco Systems Inc (NASDAQ: CSCO) (1.63%) – Cisco provides networking equipment, software, and cybersecurity solutions that help businesses manage and secure digital communications.
ix. Caterpillar Inc. (NYSE: CAT) (1.55%) – Caterpillar manufactures heavy machinery and equipment used in construction, mining, energy, and infrastructure projects worldwide.
x. AbbVie Inc. (NYSE: ABBV) (1.47%) – AbbVie is a pharmaceutical company that develops and sells medicines for conditions such as autoimmune diseases, cancer, neurological disorders, and aesthetics treatments, including Botox.
Looking at the ETF’s top holdings, investors will notice that many are household names with strong market positions and lengthy operating histories, characteristics that are commonly associated with value investing.
4. Does Vanguard Value ETF Pay Dividends?
Yes, it does.
The Vanguard Value ETF distributes dividends on a quarterly basis, typically in March, June, September, and December each year.
The ETF’s dividend payouts and yields over the past 5 years are as follows:
| Financial Year | Dividend Per Unit (US$) | Dividend Yield |
|---|---|---|
| 2021 | US$3.1569 | 2.15% |
| 2022 | US$3.5322 | 2.52% |
| 2023 | US$3.6705 | 2.46% |
| 2024 | US$3.9158 | 2.31% |
| 2025 | US$3.9060 | 2.05% |
Dividend distributions increased every year between 2021 and 2024 before declining marginally in 2025.
The slight decline in 2025 was primarily due to a lower second-quarter distribution, rather than any structural weakness within the ETF itself.
Over the five-year period, the ETF’s dividend payout recorded a compound annual growth rate (CAGR) of approximately 4.4%, demonstrating its ability to generate growing income over time.
That said, investors should note that the ETF’s primary objective is long-term capital appreciation rather than income generation.
5. How has the ETF Performed Historically?
The following is how the ETF’s unit price have moved over the past 5 years (between 2021 and 2025) on a monthly timeframe:
Assuming an investor purchased units at the ETF’s opening price of US$119.29 on 4 January 2021 and held them until 31 December 2025, when the ETF closed at US$190.99, the investment would have generated an unrealised capital gain of approximately 60%.
This translates into a CAGR of about 9.9%.
When dividends received over the same period are included, the total return increases to approximately 75%.
In my view, these returns are respectable, particularly when considering that the ETF focuses on mature, dividend-paying companies rather than higher-risk growth stocks.
6. How Does Vanguard Value ETF Compare With the Vanguard S&P 500 ETF?
Many investors compare the Vanguard Value ETF with the Vanguard S&P 500 ETF (NYSE ARCA: VOO), which tracks the broader U.S. stock market.
Some key differences include:
| Vanguard Value ETF (NYSE ARCA: VTV) | Vanguard S&P 500 ETF (NYSE ARCA: VOO) |
|---|---|
| Focuses on value stocks | Tracks the entire S&P 500 Index |
| Typically offers a higher dividend yield | Typically offers a lower dividend yield |
| Higher exposure to Financials and Industrials | Higher exposure to Technology |
| Lower valuation multiples | Higher valuation multiples |
| May outperform during value-led market cycles | May outperform during growth-led market cycles |
7. What are Some of the Key Risks Investors Should be Aware of?
Like any equity investment, the Vanguard Value ETF is not without risks.
i. Market Risk: As the ETF is fully invested in U.S. equities, its unit price will decline if the broader stock market experiences a downturn.
ii. Relative Performance Risk: There may be prolonged periods when growth stocks significantly outperform value stocks. During such periods, the Vanguard Value ETF may underperform broader market indices or growth-focused funds.
iii. Interest Rate Risk: Value stocks, particularly those that pay consistent dividends, can become less attractive when interest rates fall rapidly, as investors may shift capital towards higher-growth companies.
iv. Sector Exposure Risk: Although diversified, the ETF maintains meaningful exposure to sectors such as Financials, Industrials, and Energy. Weakness in these sectors could negatively affect overall performance.
8. What are the Fees Associated with the ETF?
The Vanguard Value ETF has an expense ratio of just 0.03% per annum.
This means that for every US$10,000 invested, investors pay only about US$3 annually in management fees.
Compared to actively managed mutual funds and many competing ETFs, this is exceptionally low and is one of Vanguard’s key competitive advantages.
Low fees are important because they leave more of an investor’s returns working for them over the long term.
9. How Can You Invest in the ETF?
You can invest in the Vanguard Value ETF the same way you invest in other US-listed stocks using your brokerage account.
Closing Thoughts
In my view, the Vanguard Value ETF offers investors a simple and cost-effective way to gain exposure to a diversified portfolio of established U.S. companies trading at reasonable valuations.
Its sector allocation is relatively balanced, with no single sector accounting for an overwhelming proportion of the portfolio. This contrasts with the Vanguard S&P 500 ETF, where the Information Technology sector alone represented approximately 38.6% of the index at the end of 2025.
At the same time, many of the ETF’s largest holdings are globally recognised businesses such as Berkshire Hathaway, JPMorgan Chase, Exxon Mobil, Walmart, Johnson & Johnson, and Micron Technology. These companies generally possess strong competitive positions, robust balance sheets, and long operating histories.
Performance-wise, the ETF has delivered respectable returns over the past 5 years. An investor who remained invested from the beginning of 2021 through the end of 2025 would have achieved a total return of approximately 75%, including dividends received.
That said, income-focused investors in Singapore may find the ETF’s dividend yield of around 2% less attractive when compared to Singapore-listed REITs, which typically offer yields in the region of 5% to 6%.
In addition, Singapore investors should also take into account the 30% U.S. withholding tax imposed on dividends received from U.S.-listed ETFs, which will further reduce the effective yield received.
Ultimately, the Vanguard Value ETF may appeal more to investors seeking a combination of long-term capital growth, broad diversification, and modest dividend income rather than those prioritising high current yields.
Disclaimer: At the time of writing, I do not have units of the Vanguard Value ETF.
