The word ‘value’ has multiple meanings as a noun and verb. When the average person thinks of ‘value’ as it relates to price, they generally associate it with receiving a cheaper or discounted price on something that may be worth more on the open market or to another party.
The word ‘value’ has multiple meanings as a noun and verb. When the average person thinks of ‘value’ as it relates to price, they generally associate it with receiving a cheaper or discounted price on something that may be worth more on the open market or to another party. Related to finance and investments, many will initially think of Benjamin Graham and Warren Buffet buying stocks or companies priced below their intrinsic value to capitalize on the market’s mispricing. Others may think of risk-off sectors like financials, industrials, energy, materials, utilities, and consumer staples when pondering potential allocation to value stocks within a portfolio. When potentially buying a value related ETF – like the Vanguard Value ETF (VTV) – an investor may be thinking they’re buying a basket of stocks from the aforementioned sectors or those that ole’ Uncle Warren may hold in his portfolio. But a look under the hood of holdings in VTV – as well as other value funds – may lead to surprising discoveries.
Below is a size/style breakdown and sector breakdown of the 300+ holdings within VTV (as of 6/30). Additionally, the table to the right shows the top and bottom 10 stocks attributing to the performance of the fund on a year-to-date basis (through 8/5). Upon examining, readers may be scratching their heads, thinking we got the holdings of VTV mixed up with the fund’s growth counterpart, the Vanguard Growth ETF (VUG). But nope, it’s right. As of VTV’s most recent portfolio evaluation at the end of Q2, the size and style allocation is overweight stocks that are classified as large cap blend and roughly a fifth of the portfolio in classic growth names. While the portfolio is overweight in risk-off sectors like financials, industrials, and healthcare, risk-on sectors like technology and consumer discretionary maintain notable allocations.
Looking at the performance attribution for VTV on a year-to-date basis through 8/5 reveals that many of the largest contributors to the ETF’s upside performance have come from technology. Micron (MU), Intel (INTC), and Cisco Systems (CSCO) are current holdings with significant allocations that have provided recent fodder for the fund. No one could blame even the most seasoned advisor for being a little surprised by some of the aforementioned stocks and their inclusion within a value-oriented fund. So how does a company like AI-darling Micron (MU), a stock that is up 200% year-to-date, end up in a value ETF?
First, understanding the metrics often looked at by value-related funds, like VTV, helps lead us down the path for understanding how a stock like Micron gets into the fund. Many fund and index providers will evaluate stocks for value funds on price-to-earnings (forward and historic), price-to-book, and price-to-sales; looking to stocks that maintain lower ratios as signaling potential future stock appreciation in step with growth in fundamentals of the company. While potentially surprising, Micron maintains lower, single digit price-to-earnings (current and forward), price-to-book, and price-to-sales metrics than the likes of Nvidia (NVDA) and Apple (AAPL).
Though Micron was singled out due to its performance and outsized weighting within VTV, there are other examples of stocks that may be initially perceived as a growth stocks. Even within the year-to-date performance contribution table shown above, Applied Materials (AMAT) and Western Digital (WDC) were holdings and notable contributors within VTV up until this quarter when they were removed for no longer meeting the criteria evaluated. Other tech-related names like Intel (INTC), Cisco (CSCO), and Dell (DELL) have provided additional fodder.
The uptick within technology stocks this week may have led to the thought that growth may quickly overtake value. But as we’ve discussed, the technology rally has also benefited value as well. Recent relative strength within healthcare and financials have also helped value sustain against growth. Below is the relative strength chart of the Vanguard Growth ETF (VUG) against the Vanguard Value ETF (VTV) on a 3.25% RS chart. The long-term relationship still favors growth, but value has been favored more often in the near-term during 2026 and is still currently favored over growth with the RS chart residing in a column of Os since late June.
Given the discussion around how funds and index providers may define value, the allocation currently seen within VTV, and value’s positive near-term relative strength over growth, portfolios will still have either an overweight toward value or potentially a more equal mix of value and growth. Additionally, being cognizant of what individual stocks may already be sizeable holdings within a portfolio, or in a value fund being considered, will be important. Should users be looking to examine the holdings of a particular fund (both ETFs and mutual funds) more, the ETF (or Fund) Details and Holdings links above the point and figure chart of the fund are helpful in evaluation.
