Vanguard Fund Offers Low-Risk Option for Stock Market Investors
When the stock market takes a downturn, it's natural to worry about the value of your investments. Instead of chasing high-flying stocks that may be vulnerable to sharp drops, consider parking some money in a solid exchange-traded fund (ETF) like the Vanguard Morningstar Value ETF (NYSE: VTV). This ETF tracks the CRSP US Large Cap Value Index, which assesses factors such as price-to-book and price-to-sales ratios to determine undervalued stocks.
The Vanguard Morningstar Value ETF has a low expense ratio of 0.03%, meaning you'll pay just $3 annually for every $10,000 invested. Over the past five and 10 years, this ETF has averaged annual gains of around 12.5%. It's also a respectable dividend payer, with a recent dividend yield of 1.9%.
The fund's beta of 0.69 reflects low volatility: if the overall market drops by 10%, this fund might drop by only 6.9%. The ETF holds more than 300 stocks, including Micron Technology and Johnson & Johnson.