Vanguard Value ETF Outperforms S&P 500 Amid Tech Correction

The Vanguard Group saw its Morningstar Value ETF (VTV) significantly outperform the S&P 500 in 2026, delivering a 17.2% return compared to the index's 7.4% gain as of November 5. This divergence stems from a sharp correction in the technology sector, driven by investor concerns regarding the sustainability of artificial intelligence infrastructure spending. While the S&P 500 maintains a 35.5% weighting in technology, the Value ETF limits its exposure to 10.6%, focusing instead on large-cap value stocks including Berkshire Hathaway, JPMorgan Chase, and Micron Technology.

In contrast, the Vanguard Morningstar Growth ETF (VUG) has faced recent short-term volatility, declining 11% over the past month. This downturn coincides with the Nasdaq Composite entering correction territory as of November 6. The Growth ETF is heavily concentrated in technology, with the sector comprising 72.1% of its holdings and including all of the Magnificent Seven companies.

Despite the current tech slump, the Growth ETF maintains a superior long-term record since its 2004 inception, returning 895% against the S&P 500's 539%. The fund has historically recovered from three major bear markets, including the 2008 financial crisis and the 2022 downturn, supported by blue-chip holdings such as Eli Lilly, Visa, and Costco Wholesale.