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U.S. News evaluated 330 Large Value Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
Note: Profile written for different share class.
The fund has returned 22.39 percent over the past year, 16.03 percent over the past three years, 18.48 percent over the past five years, and 7.89 percent over the past decade.
|Trailing Returns||Updated 06.30.2014|
|Year to date||7.2%|
|3 Years (Annualized)||16.0%|
|5 Years (Annualized)||18.5%|
|10 Years (Annualized)||7.9%|
The Vanguard Value Index Fund's broad diversification and low costs are some of its strongest selling points.
As of July 03, 2014, the fund has assets totaling $31.93 billion. Its portfolio consists of value stocks of large-cap U.S. companies. The fund seeks to track the MSCI U.S. Prime Market Value Index, which is made up of broadly diversified value stocks of the 750 largest U.S. companies.
Growth stocks benefited the most from the 2009 market rally, leaving the Value Index Fund behind because it focuses on large-cap value stocks with strong balance sheets. The MSCI indexes use buffer zones to organize capitalization and equity style, which prevents high turnover of stocks. Because of these buffer zones, the fund has the potential to reap some benefits from market rallies that may include mid-cap and growth stocks, according to Morningstar. The fund has returned 22.39 percent over the past year and 16.03 percent over the past three years.
The fund tracked the S&P 500/Barra Value Index from its 1992 inception until 2003, when it switched to the MSCI U.S. Prime Market Value Index. The fund has a strong record of matching its benchmark, according to Morningstar. The fund has returned 18.48 percent over the past five years and 7.89 percent over the past decade.
The passively managed index fund consists of about 450 value stocks in the MSCI U.S. Prime Market Value Index. The stocks are selected based on their price-to-book ratio, price relative to Wall Street analysts' earnings estimates, and dividend yield. The fund invests at least 80 percent of its assets in stocks that make up the index, holding each in similar proportions as the index.
Role in Portfolio
Morningstar calls the fund a core holding in an investment portfolio.
The fund is passively managed by Gerard O'Reilly. He has advised the fund since 1994 and has been working with Vanguard since 1992, according to the prospectus.
Vanguard Value Index Fund has an expense ratio of 0.08 percent.
The fund risks being slow to rebound during market rallies compared with returns from growth stocks and the overall stock market. Also, larger-cap value stocks tend to go through cycles of outperforming and underperforming the stock market.