This is a US large-cap value ETF that tracks the Russell 1000 Value Index. It holds a broad range of large-cap stocks that look relatively undervalued on valuation metrics, weighted by market capitalization, so it follows the performance of the value style as a whole.

It suits investors who want to raise their allocation to value stocks relative to growth stocks and seek long-term diversified investing at a low fee.

It is a passively managed (index-tracking) ETF run by Vanguard.

The fund holds the constituents of the Russell 1000 Value Index in proportion to their market-cap weights, an approach close to full replication, and tracks the performance of US large-cap value stocks as a whole. Changes in constituents and weights are reflected automatically when the index is reconstituted, and there is no separate active stock selection.

• Lower fees than the category average
• Broad diversification across large-cap value stocks

Assets under management (AUM) stand at $23.0B, and the expense ratio is 0.06% per year.

The fee difference relative to similar value ETFs such as VTV and IWD is a key selection criterion.

The value style has shown a pattern in which its strength relative to growth stocks shifts with interest rates and the economic cycle. Short-term returns are heavily influenced by sector weights and the rate environment, and the fund can lag in growth-led markets.

Steady demand for value-style diversification keeps fund flows relatively stable. Money has also tended to move into the value category during periods of market volatility or when concerns about growth-stock valuations come to the fore.

Its strengths are a low fee and broad diversification across large-cap value stocks, while its weaknesses are relative underperformance in growth-led markets and sector concentration.

As shown in the table, VTV is a lower-fee direct substitute in the same large-cap value category, while IWD and IVE are similar ETFs that track the Russell 1000 Value and the S&P 500 Value, respectively, so fee differences are the point of comparison. You can also widen the market-cap spectrum with Vanguard's mid-cap value fund VOE and small-cap value fund VBR, or balance the portfolio with the growth-style VUG.

Here are the points to review before investing in VONV. It works well as a value-style core holding, but you should thoroughly check style underperformance in growth-led markets, concentration in traditional value sectors such as financials and energy, and currency exposure in advance.

Relative underperformance in growth-led markets and concentration in traditional value sectors are the main sources of volatility. Investors should keep in mind that the value style can trail the market for extended periods.

It is a core holding suited to long-term investors who want to diversify across US large-cap value stocks at a low fee. To cut costs further, consider VTV alongside it, and to broaden market-cap coverage, consider VOE and VBR.