What VTV actually is

VTV is Vanguard’s value ETF for large US companies. It holds hundreds of established businesses that are priced lower than their growth and earnings suggest. Many of them are mature companies that pay dividends.

What is inside

Value indexes lean toward financials, health care, consumer staples, energy and industrials, and away from the fast-growing technology names that dominate growth funds. The result is a broad fund with a different personality from the S&P 500.

Distributions

Because value companies tend to pay out more of their earnings, VTV’s yield is usually higher than a growth or total-market fund, though lower than a dedicated high-dividend fund. Payments are made quarterly and change with the dividends of the holdings.

What to keep in mind

  • Style cycles. Value can lag growth for years, and the reverse.
  • Sector tilt. It holds more banks and energy than the broad market.
  • Not a dividend-growth screen. It is chosen by valuation, not payout.

Quick take

VTV is a low-cost way to tilt a portfolio toward established value companies, with a dividend yield that is usually above the market’s.