Vanguard US Minimum Volatility ETF (VFMV) - Morningstar

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Morningstar’s Analysis VFMV

Medalist rating as of Jan 31, 2026.

A sound investment process and strong management team underpin Vanguard US Minimum Volatility ETF's Morningstar Medalist Rating of Gold.

Our research team assigns Gold ratings to strategies that they have the most conviction will outperform a relevant index, or most peers, over a market cycle on a risk-adjusted basis.

• Process Pillar

  Jan 31, 2026 High

• People Pillar

  Jan 31, 2026 Above Average

• Parent Pillar

  Jan 31, 2026 High

• Summary
• Process
• People
• Parent
• Performance
• Price

A sound investment process and strong management team underpin Vanguard US Minimum Volatility ETF's Morningstar Medalist Rating of Gold.

Morningstar Manager Research

Summary

The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.

The strategy's effective investment philosophy supports a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant underweight position in volatility exposure and an overweight in yield exposure compared with category peers. Low volatility exposure is attributed to stocks with a lower standard deviation of returns. And a high yield exposure is rooted in holding high dividend-paying or buyback stocks. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm a High Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

by Morningstar Manager Research Rated on Jan 31, 2026 Published on Feb 23, 2026

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term.

Morningstar Manager Research

Process

High

Vanguard US Minimum Volatility ETF earns a High Process Pillar rating.

The most important driver of the rating is its parent firm's impressive long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.5 stars. The parent firm's five-year risk-adjusted success ratio of 70% also strengthens the process. The measure indicates the percentage of a firm's funds that have outperformed their respective category's median return for the period. Their impressive success ratio suggests that the firm does well for investors and that this fund may benefit from that. Impressive risk-adjusted performance also supports the process, as shown by the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk.

This strategy leans toward larger, deeper value companies than its average peer in the Mid-Cap Blend Morningstar Category. Looking at additional factor exposure, this strategy has continually underweighted stocks that have a lower standard deviation of returns compared with Morningstar Category peers over the past few years. These low-risk stocks are typically at their best when markets are not. Low volatility exposure contributes to limited loss on the downside at the cost of a lag in bull markets. In the latest month, the strategy was also less exposed to the Volatility factor compared with Morningstar Category peers. This strategy has also displayed a tendency to hold more companies with high dividend or buyback yields than peers over recent years. Higher-yield stocks can provide dependable income, but also have their risks. Dividend payers may cut payouts, for instance, if their earnings fall. Compared with category peers, the strategy also had more exposure to the Yield factor in the most recent month. Additionally, this strategy has demonstrated a bias away from momentum stocks during these years. Momentum strategies typically bet that stocks that have recently outperformed will continue to do so, and those that have recently underperformed will keep lagging. Avoiding the former and buying the latter could indicate that managers are averse to chasing momentum. In recent months, the strategy also had less Momentum factor exposure than its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section.

The portfolio is overweight in technology and communication services relative to the category average by 9.4 and 8.5 percentage points, respectively. The sectors with low exposure compared with category peers are industrials and consumer cyclical, underweight the average by 9.9 and 5.0 percentage points of assets, respectively. The portfolio is composed of 189 holdings and invests 15.2% of assets in its top 10 holdings, similar to the category average. And finally, in terms of portfolio turnover, looking at year-over-year movements, 34% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

by Morningstar Manager Research Rated on Jan 31, 2026 Published on Feb 23, 2026

Despite only one portfolio manager listed on the strategy, Vanguard US Minimum Volatility ETF is in good hands.

Morningstar Manager Research

People

Above Average

This leads to the fund's Above Average People Pillar rating. Scott Rodemer brings over three years of portfolio management experience to the table. Isolating the analysis to the fund at hand, Scott Rodemer has delivered a mixed track record, leading the average category peer but lagging the category benchmark for the past two-year period. Unfortunately, Scott Rodemer has not disclosed a personal investment in the strategy. Personal investment from a manager shows confidence and helps to align their interests with fundholders.

Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

by Morningstar Manager Research Rated on Jan 31, 2026 Published on Feb 23, 2026

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

Daniel Sotiroff

Senior Analyst

Parent

High

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.

by Daniel Sotiroff Rated on Jan 31, 2026 Published on Jul 28, 2025

This share class, with returns reported in US Dollar, has had a mixed track record, with mixed returns compared with peers but successful when adjusted for risk.

Morningstar Manager Research

Performance

The share class led the category index with a higher Sharpe ratio, a measure of risk-adjusted return, over the trailing five-year period. This strategy had more-consistent returns, as denoted by a lower standard deviation, 11.8%, than the benchmark, 16.6%. Finally, the share class proved itself ineffective as it was unable to generate alpha, over the same period, against the category group index: a benchmark that encapsulates the performance of the broader asset class.

The strategy's long-term absolute returns are lower than the benchmark index. On a five-year basis, this share class outpaced the category index by an annualized 1.0 percentage point. But when expanding to a seven-year period, the fund trailed the index by 1.9 percentage points. The fund's track record also continues to be mixed when compared against peers. The share class outperformed the category's average return by 1.1 percentage points over five years and fell behind it by 67 basis points over seven years.

by Morningstar Manager Research Published on Feb 23, 2026

Low-cost investments routinely outperform high-cost investments.

Morningstar Manager Research

Price

Thus, assessing cost is a critical step in any investment evaluation. This share class is in the cheapest quintile of its Morningstar Category. Its low expense ratio, paired with the fund’s People, Process, and Parent Pillars, indicates that this share class can deliver positive alpha against its category benchmark, leading to its Morningstar Medalist Rating of Gold.

by Morningstar Manager Research Published on Feb 23, 2026 Close Full Analysis

Portfolio Holdings VFMV

More VFMV Holdings

• Current Portfolio Date Dec 31, 2025
• Equity Holdings —
• Bond Holdings —
• Other Holdings —
• % Assets in Top 10 Holdings 15.2

Top 10 Holdings	% Portfolio Weight	Market Value USD	Sector
Lam Research Corp	1.57	5M	Technology
Keysight Technologies Inc	1.57	5M	Technology
Analog Devices Inc	1.56	5M	Technology
Johnson & Johnson	1.54	5M	Healthcare
TJX Companies Inc	1.52	5M	Consumer Cyclical
Morgan Stanley	1.51	5M	Financial Services
Coca-Cola Co	1.50	5M	Consumer Defensive
Microsoft Corp	1.49	5M	Technology
Cisco Systems Inc	1.49	5M	Technology
Berkshire Hathaway Inc Class B	1.48	5M	Financial Services

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