3 Reasons Why Vanguard's Worst-Performing ETF in 2025 May Be Worth Buying in June

Daniel Foelber, The Motley Fool

Sat, Jun 7, 2025, 5:15 AM 6 min read

• The Vanguard Small-Cap 600 Value ETF contains hundreds of companies.

• The fund is not top-heavy, which protects against concentration risk.

• The ETF sports a dirt cheap valuation along with a high yield.

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Investment management firm Vanguard Group has over 90 exchange-traded funds (ETFs), many of which offer low-cost fees. The worst-performing in 2025 is the Vanguard Small-Cap 600 Value ETF (NYSEMKT: VIOV) -- which is down just over 12% year to date at the time of this writing.

Here are three reasons why the beaten-down ETF may be worth buying now and one factor that may make it worth passing on.

The fund includes 460 holdings with a median market capitalization of just $2.3 billion. This is a far different approach than funds that concentrate on just a handful of holdings.

Even the Vanguard S&P 500 ETF (NYSEMKT: VOO), which mirrors the performance of the S&P 500, has over 35% of its holdings in just 10 companies. No single company in the Vanguard Small-Cap 600 Value ETF has more than a 1.1% weighting.

Top holdings include semiconductor company Qorvo, medical device company Teleflex, auto parts company BorgWarner, mortgage lender Mr. Cooper Group, and insurance company Jackson Financial, among others. Many of these companies are hardly household names, but their hidden-gem nature could appeal to value investors looking for exposure to companies they don't already own.

One of the most appealing attributes of the Vanguard Small-Cap 600 Value ETF is that it is spread out across stock market sectors. And the sectors it concentrates on tend to be more value-oriented. Here's a look at how its sector concentration stacks up against the Vanguard S&P 500 ETF.

Data source: Vanguard.

The composition of the Vanguard Small-Cap 600 Value ETF is nothing like the S&P 500, which may interest folks looking for more exposure to value-focused and cyclical sectors like financials and industrials and less exposure to growth-focused sectors like tech.