Vanguard Russell 1000 Value Index Fund ETF Shares VONV

Vanguard Russell 1000 Value ETF holds a quantitatively derived Gold Morningstar Medalist Rating. The rating reflects that it has scored particularly well on factors Morningstar research associates with future outperformance relative to category peers.

People: Above Average

Note: This share class' People Pillar rating and analysis are inherited from an analyst-covered share class under the same Strategy Provider Company (rolled up to Branding Name) and Morningstar Category Broad Group: Vanguard FTSE All-Wld ex-US SmCp ETF (SecID: FOUSA08NFZ).

Process: Above Average

Note: This share class' Process Pillar rating and analysis are inherited from an analyst-covered passive share class, which tracks the same index: iShares Russell 1000 Value ETF (SecID: FEUSA0001C).

Performance (in US Dollar)

Over the past 12 months, Vanguard Russell 1000 Value ETF share class returned 29.2%, underperforming its category index, the Russell 1000 Value TR USD Index (29.3%), but outperforming its Morningstar category peers (26.1%). Across 10 years, the fund returned 11.1% per year, matching both the index (11.2% per year) and its Morningstar Category average (11% per year).

Price

Vanguard Russell 1000 Value ETF's Prospectus Adjusted Expense Ratio is 0.06% per year. It places it in the cheapest quintile of the Morningstar US Fund Large Value Category, where the median fee is 0.75% per year. This cost positioning translates into a Medalist Rating Price Score of 2.41, which reflects its relative price positioning within the category. The Price Score ranges from -2.50 (most expensive) to +2.50 (cheapest), with higher scores indicating better cost competitiveness.

The fund tracks the Russell 1000 Value Index, which collects large- and mid-cap stocks exhibiting strong value characteristics. The index assigns a composite score to all stocks in the Russell 1000 Index based on fundamental metrics such as book value/price and five-year sales/share growth. It uses those scores to rank stocks and sort them into value and growth indexes. Stocks in the middle that do not have a clear style distinction may be partially allocated to both the value and growth versions of the Russell 1000 Index. Approximately 30% of the stocks within the Russell 1000 Growth Index are also included in the Russell 1000 Value Index.

The index weights stocks by market cap. Market-cap weighting is a cost-effective approach that channels the market’s collective view of each stock’s relative value. This approach also reduces turnover and associated trading costs. The fund’s average turnover over the past five years was 16%, significantly lower than the category average of 57%.

The fund reconstitutes annually, moving assets from areas that have gotten more expensive and toward undervalued stocks and sectors. It has favored the financials, industrials, and healthcare sectors over the past five years. At each reconstitution, it reduces exposure to sectors that are overvalued and adds to sectors with attractive valuations. This occurred in 2025 when the fund nearly doubled its exposure to communication services stocks. The price ratios that caused certain communication services stocks to appear attractive in 2025 made the same stocks appear overvalued and no longer eligible for the portfolio in 2023.

The portfolio’s value characteristics and sector allocations mimic the category average. Metrics such as price/earnings, price/book, and dividend yield closely match the average large-value fund. No sector weighting deviated by more than 5 percentage points from the category average in the trailing 10 years through March 2026. The financial-services sector tends to be the largest of any, much like many of the fund’s category peers.

Note: This share class' Process Pillar rating and analysis are inherited from an analyst-covered passive share class which tracks the same index: iShares Russell 1000 Value ETF (SecID: FEUSA0001C).

Vanguard's equity index group earns an Above Average People Pillar rating for its well-supported and stable management team that's adept at leveraging Vanguard's comprehensive resources. Its portfolio managers benefit from the firm's global infrastructure and advanced portfolio management technology, which facilitates cost-efficient trading around the globe. The infrequent turnover of managers, coupled with Vanguard's practice of rotating them across various funds, enhances their expertise and understanding of different market segments.

The fund's managers directly handle trading, providing them with deeper insights into the portfolio's operations than a stand-alone trader might have. They are backed by a global team of dedicated personnel and employ sophisticated, scalable technology to minimize their workload and enhance tracking accuracy. Vanguard's independent risk management team plays a crucial role in ensuring its funds adhere to predetermined tracking tolerances. It collaborates closely with the managers to oversee trades and address potential issues proactively. Vanguard compensates managers based on tracking error and excess return metrics to foster a culture of accountability and ensure that the management team's interests are closely tied to investors'.

Note: This share class' People Pillar rating and analysis are inherited from an analyst-covered share class under the same Strategy Provider Company (rolled up to Branding Name) and Morningstar Category Broad Group: Vanguard FTSE All-Wld ex-US SmCp ETF (SecID: FOUSA08NFZ).

Vanguard maintains its High Parent Pillar rating as it continues to grow under new leadership.

CEO Salim Ramji has had a busy first year captaining Vanguard’s crew, and the ship remains pointed in the right direction. The firm made its largest round of fee cuts in early 2025, which came at an estimated cost of USD 350 million. It established a separate division dedicated to its advice and wealth management efforts, a sign that it wants to seriously compete within those lines of business. Asset growth has continued to be a huge success. Only BlackRock’s inflows rival the money Vanguard is taking in. Likewise, the number of clients it serves has more than doubled since 2015.

Despite that success, an ever-growing number of clients has presented a challenge: Vanguard can’t grow its services fast enough to keep up with demand. In some instances, it has had to curb certain services and capabilities or raise fees on others to cope, causing some loyal clients to criticize what they perceive as deteriorating services.

Vanguard has ambitions to bring its disruptive legacy to the bond market. It created roughly a dozen low-cost bond exchange-traded funds for US investors and several others abroad over the 12 months through June 2025. All have low fees in their respective categories, and the actively managed strategies align with Vanguard’s philosophy. They are relatively easy to understand and are conservatively managed.

Vanguard has another opportunity to prove that clients are still its priority. On the surface, its endeavor into the high-fee deal-making world of private assets alongside Wellington and Blackstone looks like a cultural mismatch. So far, the collaboration hasn’t produced anything that’s concerning.

Note: This share class' Parent Pillar rating is analyst-driven, as its Branding Name, Vanguard (Branding Name ID: BN00000AAL), is covered by Morningstar Manager Research.

Performance is evaluated in US Dollar, measured to the end of April 2026.

Short-Term Performance

Over the past 12 months, Vanguard Russell 1000 Value ETF share class returned 29.2%, underperforming its category index, the Russell 1000 Value TR USD Index (29.3%), but outperforming its Morningstar category peers (26.1%). Over the three-year period, it returned 16.7% per year, lagging the index (16.8% per year) while outperforming its Morningstar category peers (15.7% per year).

Long-Term Performance

The fund's five-year annualized return of 10.2% fell short of the benchmark (10.3% per year) but mirrored the Morningstar Category average (10.1% per year). Across the 10-year period, the fund returned 11.1% per year, mirroring both the index (11.2% per year) and its Morningstar Category average (11% per year).

Vanguard Russell 1000 Value ETF's Prospectus Adjusted Expense Ratio is 0.06% per year. It places it in the cheapest quintile of the Morningstar US Fund Large Value Category, where the median fee is 0.75% per year. This cost positioning translates into a Medalist Rating Price Score of 2.41, which reflects its relative price positioning within the category. The Price Score ranges from -2.50 (most expensive) to +2.50 (cheapest), with higher scores indicating better cost competitiveness.