If you’re interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the Vanguard S&P 500 Value ETF (VOOV – Free Report) , a passively managed exchange traded fund launched on 09/09/2010.
The fund is sponsored by Vanguard. It has amassed assets over $2.99 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF’s expense ratio.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.08%.
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 Healthcare sector–about 16.30% of the portfolio. Financials and Industrials round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc. (BRK.B – Free Report) accounts for about 3.17% of total assets, followed by Johnson & Johnson (JNJ – Free Report) and Exxon Mobil Corp. (XOM – Free Report) .
The top 10 holdings account for about 18.23% of total assets under management.
Performance and Risk
VOOV seeks to match the performance of the S&P 500 Value Index before …….