The Smartest ETF to Buy With $500 Today Is the Vanguard Value ETF (VTV) -- No Matter Where the Market Goes Next
Key Points
Vanguard Value offers an alternative to growth-heavy index funds.
It also pays a respectable dividend yield.
- 10 stocks we like better than Vanguard Index Funds - Vanguard Value ETF ›
If you've got $500 burning a hole in your pocket and you're looking to invest it for many years in some promising stocks, consider the Vanguard Value ETF (NYSEMKT: VTV). It's an index fund focused on value stocks, and if you're worried about a possible market correction or economic recession, it could be a great prospect for you.
Here's a closer look at the exchange-traded fund (ETF), how it invests its shareholder dollars, and its top holdings. (Remember that an ETF is a fund that trades like a stock, making it easy to get in and out of.)
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Meet the Vanguard Value ETF
The Vanguard Value ETF tracks the CRSP U.S. Large Cap Value Index, which measures the performance of large-capitalization value stocks. It determines which ones qualify as value stocks by assessing the following factors: price-to-book ratios, forward-looking price-to-earnings (P/E) ratios, historical price-to-earnings (P/E) ratios, price-to-dividend ratios, and price-to-sales ratios.
Vanguard is known for low fees, among other things, and this ETF is no exception, sporting a tiny expense ratio (annual fee) of just 0.04%. So for every $10,000 you have invested in it, you'll pay only $4 per year in fees.
The table shows how the ETF has performed lately. I'm including the performance of the Vanguard S&P 500 ETF (NYSEMKT: VOO) as well for comparison.
|
Fund |
Five-Year Avg. Annual Return |
10-Year Avg. Annual Return |
15-Year Avg. Annual Return |
|---|---|---|---|
|
Vanguard Value ETF |
12.40% |
11.55% |
11.77% |
|
Vanguard S&P 500 ETF |
14.91% |
14.76% |
14.17% |
Data source: Morningstar.com, as of Dec. 9, 2025.
It's true that the S&P 500 (SNPINDEX: ^GSPC) ETF has outperformed the value ETF, but that's because it includes many growth stocks -- which can fall harder during market pullbacks than value stocks likely will. Consider, too, that a standard S&P 500 fund will have roughly 40% of its total value in just its top 10 holdings -- out of 500 holdings.
By the way, those top 10 will include companies such as Nvidia, Apple, Microsoft, and Amazon. Nvidia alone recently made up about 8.5% of the value of the S&P 500 index.
What's in the Vanguard Value ETF?
So what, then, is in the Vanguard Value ETF? Here are the ETF's recent top holdings:
|
Stock |
Percent of ETF |
|---|---|
|
JPMorgan Chase |
3.60% |
|
Berkshire Hathaway, Class B |
3.22% |
|
ExxonMobil |
2.12% |
|
Johnson & Johnson |
1.98% |
|
Walmart |
1.93% |
|
AbbVie |
1.68% |
|
Home Depot |
1.64% |
|
Procter & Gamble |
1.53% |
|
Bank of America |
1.39% |
|
UnitedHealth Group |
1.35% |
Data source: Vanguard.com. As of Oct. 31, 2025.
Notably, these top 10 holdings make up only about 20% of the value ETF, so it's far less concentrated.
A final plus for the Vanguard Value ETF is that it sports a meaningful dividend yield, recently 2.1%. That's a lot more than the S&P 500 recently yielded, which was 1.1%.
So if you're looking for a promising investment for your $500 -- or whatever sum you want to invest -- consider this Vanguard ETF. It offers a nice balance of growth and income.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Selena Maranjian has positions in AbbVie, Amazon, Apple, Berkshire Hathaway, Microsoft, Nvidia, and Procter & Gamble. The Motley Fool has positions in and recommends AbbVie, Amazon, Apple, Berkshire Hathaway, Home Depot, JPMorgan Chase, Microsoft, Nvidia, Vanguard Index Funds-Vanguard Value ETF, Vanguard S&P 500 ETF, and Walmart. The Motley Fool recommends Johnson & Johnson and UnitedHealth Group and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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