DEEP vs VTV

DEEPDAcquirers Small and Micro Deep Value ETF

VTVAVanguard Morningstar Value ETF

In short

DEEP Most small-cap funds buy the whole haystack. DEEP runs the Acquirer's Multiple, the buyout-firm yardstick of enterprise value to operating earnings, across the smallest 75% of US stocks and keeps about 100 names. Deep value, micro-cap deep, at a boutique price.

VTV Value investing for three cents on every hundred dollars a year. Since 2004, VTV has run a passive, fully invested portfolio of roughly 300 large US companies that screen cheap, at a fee near the industry floor.

Stated mandate

DEEP Seeks to track the performance of the Acquirers Deep Value Index before fees and expenses. The Fund uses passive indexing and focuses on small- and micro-cap stocks selected for undervaluation, fundamental strength, liquidity, and financial resilience.

VTV The fund seeks to track a large-capitalization U.S. value-stock benchmark through passive indexing and substantial replication of that index.

Why people hold it

• DEEP Ranks on the Acquirer's Multiple (enterprise value to operating earnings), the same yardstick activists and buyout firms use to price targets, then holds about 100 of the cheapest fundamentally strong names.bloomberg.commarketscreener.com
• Fishes in the smallest 75% of US listed stocks, reaching micro-caps that Russell 2000 trackers like IWM and VTWO largely leave on the shelf.aaii.com
• Rules-based and passive: the index does the picking and the fund replicates its components, and it has stayed close to that stated mandate.aaii.comusnews.com

• VTV 0.03% a year, about a sixth of the 0.18% median for US value funds. Cost is the part of the outcome the fund actually controls.
• Same recipe, very different sticker: PRXV tracks the same declared value index and charges 0.36%, twelve times VTV's fee.
• Passively managed, full replication, fully invested. No manager hunches, no cash sitting idle, and the fund has tracked its benchmark closely.vanguard.com
• One of the largest and most actively traded funds in the US value aisle, the kind of scale that keeps bid-ask spreads thin for ordinary orders.

Worth knowing

• DEEP The 0.80% fee sits well above the 0.25% typical for its small-cap cohort, and plain trackers like VB and SCHA charge 0.03%. Boutique pricing for a niche screen.
• A small, thinly traded fund holding micro-caps. Spreads can run wider than on the cohort's heavily traded giants, so how you place the order matters more here.
• Today's small and micro deep-value mandate dates to a 2020 index change. The ticker launched in 2014 running a different, large-cap-focused strategy, so the full record is not apples to apples.prnewswire.com

• VTV Large caps only, about 300 of them. Cheap mid- and small-cap stocks live in separate funds (VOE, VTWV), so this is one slice of value, not the whole market.
• It is a value screen by design, so the priciest fast growers are largely filtered out. In growth-led stretches it can move very differently from a total-market fund.
• Income arrives quarterly, in four instalments rather than a monthly drip.

Full DEEP profile⁠

Full VTV profile⁠