Morningstar

10 Top-Performing Large-Value ETFs

Funds from Vanguard, iShares, and Fidelity are among the best performers.

Stylebox illustration for Large Value Funds
Securities in This Article
Vanguard Morningstar Mega Cap Value ETF
(MGV)
Schwab Fundamental U.S. Large Company ETF
(FNDX)
iShares Core S&P U.S. Value ETF
(IUSV)
Fidelity High Dividend ETF
(FDVV)
Alphabet Inc Class C
(GOOG)

This article mentions funds that have an issuer-initiated rating and/or track a Morningstar Index. For full disclosure information, please refer to the specific funds, which are demarcated with a * symbol, listed below.

The third quarter of 2024 proved rewarding for investors in large-value funds, thanks to the rotation out of the big-name technology stocks that had led the bull market. During the quarter, the average large-value fund posted an 8.58% return. Their gains outpaced large blend funds, which rose 7.93%, and large growth funds, which rose 2.22%.

For this article, we screened for the top-performing exchange-traded funds in the large value category. We looked for those with the best returns over the last one-, three-, and five-year periods. Offerings from Vanguard stood out, taking up three of the 10 funds. Notably, many funds in this category track the S&P 500 Value Index, with four of the top 10 following that benchmark. All names that passed the screen were index funds.

  • Fidelity High Dividend ETF FDVV
  • Invesco FTSE RAFI US 1000 ETF PRF
  • Ishares Core S&P US Value ETF IUSV
  • Ishares S&P 500 Value ETF IVE
  • Schwab Fundamental US Large Company ETF FNDX
  • SPDR® Portfolio S&P 500 Value ETF SPYV
  • Vanguard Mega Cap Value ETF MGV
  • Vanguard S&P 500 Value ETF VOOV
  • Vanguard Value ETF VTV
  • WisdomTree Us LargeCap Dividend ETF DLN

What Are Large-Value Funds?

Large-value portfolios invest primarily in large US stocks that are less expensive or growing more slowly than other large-cap stocks. Stocks in the top 70% of the capitalization of the US equity market are defined as large-cap. These funds are defined by low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value, and cash flow).

Large Value Funds Performance

Large-value funds have gained 19.16% this year through Oct. 14, while the overall market as measured by the Morningstar US Market Index has gained 22.26%. Large-value funds have returned 29.3% over the past year, 12.22% over the past three years, and 11.73% over the last five years, compared with the US Market Index returning 34.38%, 10.44%, and 15.63% over those same respective periods.

Screening for the Top-Performing Large Value Funds

To find the best large-value funds, we screened open-ended and exchange-traded funds in the top 33% of the category using their lowest-cost primary share classes for the last one-, three-, and five-year periods. We also filtered for funds with a Morningstar Medalist Rating of Bronze, Silver, or Gold. We excluded funds with assets under $100 million and analyst coverage that was not 100%. This left 10 funds.

Fidelity High Dividend ETF

“This index strategy takes a well-rounded approach to stock selection. Yield is the main consideration. That may give investors pause because the highest-yielding stocks tend to be some of the riskiest. The fund combats that drawback by incorporating payout ratio and dividend growth (signals of financial health) into stock selection. It also screens out firms with the worst payout ratios because companies that distribute too much of their profits can be left with little margin for error. Some sinking stocks will slip through the cracks, but these measures reject many of the market’s riskiest firms and breed a high-quality portfolio.”

—Ryan Jackson, manager research analyst

Invesco FTSE RAFI US 1000 ETF

“Favoring cheaper stocks pulls the strategy into value territory, but its holdings cover the full large- and mid-cap market. Growth stocks constituted 17% of the portfolio entering May 2024 compared with 13% of the average large-value strategy and 16% of the Russell 1000 Value Index, the Morningstar Category benchmark for the US-domiciled version. This broad scope gives the strategy an edge over stricter comparators. It boosted stakes in Amazon.com AMZN and Alphabet GOOGL/GOOG—growth stocks off-limits to most value rivals—when it rebalanced in March 2023 after both firms plummeted in the 12 months prior. Those timely trades helped the fund trounce the Russell 1000 Value Index on the year.”

—Ryan Jackson

Schwab Fundamental US Large Company ETF

“Favoring cheaper stocks pulls the fund into the large-value Morningstar Category, but its holdings cover the full large- and mid-cap markets. Growth stocks constituted 19% of the portfolio entering May 2024 compared with 13% of the average large-value fund and 16% of the Russell 1000 Value Index category benchmark.”

—Ryan Jackson

Vanguard Value ETF

“Vanguard Value constructs a well-diversified, market-cap-weighted basket of US value stocks at a low cost. The fund replicates the CRSP US Large Cap Value Index, which selects cheaper large-cap stocks and weights them by their market cap. These companies have modest valuations that reflect their dimmer outlooks. However, performance relative to expectations is what counts, and these firms’ meager valuations are a lower hurdle to deliver solid returns.”

—Mo’ath Almahasneh, associate manager research analyst

WisdomTree US LargeCap Dividend ETF

“The WisdomTree LargeCap Dividend Index, which this fund fully replicates, puts a smart twist on a proven strategy. It weights 300 of the market’s largest dividend stocks by their projected cash dividends—a standard fundamental approach—then boosts those with the best-combined quality and momentum characteristics by 50%. The extra layer of factor considerations should reduce exposure to stocks whose dividend policies conceal shaky fundamentals and/or negative momentum. It also helps the portfolio handily exceed the Russell 1000 Value Index in profitability metrics like return-on-invested capital. That indicates sound exposure to the quality factor, which has historically been tied to market-beating returns.”

—Ryan Jackson

Ishares Core S&P Us Value ETF

Ishares S&P 500 Value ETF

SPDR Portfolio S&P 500 Value ETF

Vanguard S&P 500 Value ETF

“The S&P 500 Value Index starts with stocks in the S&P 500. It calculates a value-growth composite score for each stock. The value metric is based on stocks’ price/book, price/earnings, and price/sales ratios. Then, each stock is assigned to either the S&P Value or S&P 500 Growth Index. Stocks exhibiting less-pronounced growth or value traits are then allocated to each index based on the relative strength of their traits until each index reaches half of the S&P 500’s market cap. The index weights stocks by market cap and implements value-growth score buffers around their lower bound to limit turnover. The index is reconstituted annually.”

—Morningstar Research

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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