This Vanguard ETF Effectively Captures the Large Value Segment of the US Stock Market

Key Morningstar Metrics for Vanguard Value Index Fund VTV

• Morningstar Medalist Rating
  : Gold
• Process Pillar
  : Above Average
• People Pillar
  : Above Average
• Parent Pillar
  : High

Vanguard Value ETF’s reasonably priced portfolio of large stocks trading at attractive valuations has all the ingredients to perform well over the long haul.

The fund tracks the CRSP US Large Cap Value Index. It is derived from the broader CRSP US Large Cap Index, which represents approximately 85% of the US stock market by capitalization. CRSP assigns each stock a composite style score using growth- and value-oriented metrics, including dividend/price, sales/price, and book/price. The index uses this composite score to place stocks into a value or growth sleeve with minimal overlap between the two, reinforcing the intention of each style. This differs from peers, many of whom allow some stocks to exist in both value and growth indexes.

Market-cap weighting is well-suited to the large-value universe. Large-cap stocks tend to reflect new information quickly, reducing the likelihood that active managers can consistently generate excess returns. This approach also helps contain trading costs by minimizing changes during rebalancing. While the index may hold companies facing fundamental pressure or limited growth prospects, market-cap weighting naturally mitigates this risk by reducing exposure as share prices fall.

The fund’s overall profile closely mirrors that of the large value peer group. Sector exposures typically stay within 5 percentage points of Morningstar Category averages, and as of February 2026, communication services was the only sector deviating by more than 3 percentage points. Valuation measures, including price/earnings and price/book, have consistently aligned with category norms.

The fund remains fully invested, which can exacerbate drawdowns during broad market selloffs. Still, it effectively captures the large-value opportunity set. Over the 10 years through February 2026, it outpaced the category average by 1.34 percentage points annualized with a superior risk-adjusted return.

Morningstar acquired the Center for Research in Security Prices, the provider of the index tracked by this fund, in February 2026. Morningstar analysts work independently from the index business, and the Morningstar Medalist Ratings for funds tracking CRSP indexes are based solely on the fund’s investment merits. Analysts do not provide qualitative ratings or opinions for investments managed by Morningstar or managed investments that track Morningstar indexes that incorporate discretionary inputs assigned by Morningstar employees on an ongoing basis, such as Morningstar Economic Moat Ratings or ESG Risk Ratings.

Vanguard Value Index Fund: Performance Highlights

The fund outperformed the US large-value category average by 1.34 percentage points annualized over the 10 years through February 2026. It returned 13.12% annualized over that time. Volatility was similar to the category average, but its risk-adjusted return still came out ahead.

The fund’s focus on the largest 85% of the US market drives performance that differs from the category average. Gains among large-cap stocks have fueled much of its outperformance in recent years. Leaning heavily into the largest healthcare and financials stocks paid off, but that tailwind won’t always persist. A strict size mandate can leave the portfolio vulnerable when smaller stocks lead the market, and peers that venture further down the market-cap spectrum are better positioned to benefit from a mid- or small-cap rally.

By concentrating on the largest value-oriented stocks, the fund offers investors a more predictable return profile and should shine when the value style gains favor. Avoiding growth-leaning names that other value-focused peers include helps damp volatility and reinforces the strategy’s enduring edge.