Large-cap value stocks have arguably been a perplexing corner of the equity market for some advisors and investors and that state of play has been in place for awhile now.
It’s not that value stocks have been “bad” in the strict sense of that word. Going back to Jan. 4, 2021 – the first trading day of the current decade – the S&P 500 Value Index returned 94.4% as of April 24. Some clients and investors would likely be fine with that, particularly because that index was less volatile than its growth counterpart and the broader market over that span.
The issue is that since the start of the current decade, the S&P 500 and its growth offshoot returned an average of 111.5%, easily outpacing the S&P 500 Value Index while giving advisors and investors pause about the efficacy of purported value rotations. Value investors can take heart because 2026 is delivering signs that market breadth is widening and large-cap value stocks are benefiting.
That doesn’t mean growth stocks should be forsaken. Not when the Nasdaq-100 Index (NDX) is residing around all-time highs, but the current state of value stocks is a reminder that the popular Vanguard Value ETF (VTV) remains fashionable. So much so that it’s beating the S&P 500 and growth rivals year-to-date.
VTV for the Value Investing Win
Advisors are likely familiar with VTV. It has nearly $170 billion in assets under management, making it the largest ETF in the value category and it turned 22 years old in January, meaning it’s battle-tested across a variety of market settings.
This Vanguard ETF tracks the CRSP US Large Cap Value Index, which includes 85% of the domestic equity market while employing metrics such as dividend/price, sales/price, and book/price to arrive at its value conclusions. That index’s way of doing things is important to end users because as Morningstar’s Brian Paoli points out, there isn’t much overlap between the CRSP US Large Cap Value Index and its growth counterpart.
VTV’s overlap by weight with the Vanguard Growth ETF (VUG), which tracks the CRSP US Large Cap Growth Index, is just 3%, implying clients can own both of these of ETFs. However, the overlap by weight between two popular ETFs tracking the S&P 500 Growth and Value indexes is 25%. That may well be too high for value and growth investors’ liking. Put simply, VTV delivers on the promise of value exposure and approach has some advantages clients are apt to like.
“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,” notes Paoli. “Avoiding growth-leaning names that other value-focused peers include helps damp volatility and reinforces the strategy’s enduring edge.”
VTV Works
Context is warranted with VTV. Yes, this fund has trailed growth rivals in recent years, but within the confines of the large-cap growth ETF category, VTV has been a star.
“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,” adds Paoli.
Not surprisingly, some of VTV’s long-term advantage is attributable to its low costs. Its annual fee of 0.03% isn’t just low. It’s far below the 0.85% category average, according to Vanguard data.
Related: CAGE Match: The First Autocallable Growth ETF Aiming to Outrun the S&P 500