Key Morningstar Indicators for Vanguard Value Index Fund VTV
- Morningstar Medalist Rating: gold
- Above average
- Above average
- Expensive
The Vanguard Value ETF features a reasonably priced large-cap portfolio that trades at an appealing valuation, setting it up for potential long-term success.
This fund aligns with the CRSP US Large Cap Value Index, which is based on the broader CRSP US Large Cap Index, encompassing roughly 85% of the U.S. stock market by market cap. The CRSP assigns a composite style score to stocks through various growth and value metrics, like dividend/price, sales/price, and book/price. This composite score classifies stocks into value or growth categories, intending to minimize crossovers and stay true to each style. Unlike some competitors, this approach prevents certain stocks from being featured in both categories.
Utilizing market capitalization weighting is particularly useful for high-value universes. Large-cap stocks typically react quickly to new information, making it harder for active managers to achieve consistently higher returns. Additionally, this strategy helps keep transaction costs low by reducing the frequency of adjustments during rebalancing. Even if the index holds companies that might be struggling or have limited growth prospects, this weighting method inherently lowers exposure as stock prices fall.
The overall profile of this fund mirrors that of its large value peer group quite closely. Sector allocations usually sit within 5 percentage points of the Morningstar category average. However, as of February 2026, the only sector differing by more than 3 percentage points was communications services. Valuation metrics like price/earnings and price/book closely follow category norms.
Since the Fund is fully invested, it could face larger declines during market downturns. Still, it effectively seizes high-value opportunities. Over the decade ending in February 2026, it produced impressive risk-adjusted returns, outpacing the category average by 1.34 percentage points annually.
February 2026 also marked the acquisition of the Securities Price Research Center by Morningstar, the entity that provides the index this fund tracks. It’s essential to note that Morningstar analysts operate separately from the index business, meaning the Morningstar Medalist Rating for funds connected to the CRSP Index strictly reflects the fund’s investment qualities. Analysts do not offer qualitative assessments or views on investments managed by Morningstar or ones that track indices influenced by Morningstar employees.
Performance Highlights of Vanguard Value Index Fund
Over the 10 years ending in February 2026, the fund surpassed the U.S. large category average by 1.34 percentage points each year, delivering a return of 13.12% per annum. The volatility was comparable to the category average, yet the risk-adjusted returns were notably higher.
Focusing on the largest 85% of the U.S. market results in performance variance from the category average. The recent surge in large-cap stocks significantly contributed to this better performance. A strong emphasis on major healthcare and financial stocks has been beneficial, although that advantage may not always continue. Strict size standards can expose the portfolio to risks when small-cap stocks outperform, while peers that explore further down the market cap have better chances to capitalize on gains within mid- and small-cap stocks.
This fund, by prioritizing major value-oriented stocks, provides investors with a more predictable return profile and is expected to perform well once value stocks gain popularity. Steering clear of growth-oriented names commonly favored by other value-focused competitors seems to reduce volatility, thereby enhancing the strategy’s sustained edge.
