4 Value ETFs To Buy For Q2 2021

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Value investing is one of Wall Street’s most popular strategies. That’s because it’s one of the most lucrative options for long-term investors. And value exchange-traded funds (ETFs) allow investors to buy a basket of value stocks with a single investment, offering diversification and reducing risks. With 73 ETFs traded in the U.S. markets, value ETFs have $328.54 billion in total assets under management. These funds’ average expense ratio is 0.34%.

While growth investing proved to be more profitable than value investing over the past decade, the current, impending, economic recovery positions value stocks well to outperform their growth counterparts. That’s because the shares of many quality companies became undervalued thanks to a temporary pause in their businesses amid the worst of the COVID-19 pandemic and consequent shift in investors’ attention away from them.  Now, as the economy enters a recovery phase, investors are rotating away from pricey growth stocks to quality bargains. This is evidenced by the SPDR Portfolio S&P 500 Value ETF’s (SPYV) 13.5% returns so far this year versus the SPDR Portfolio S&P 500 Growth ETF’s (SPYG) 9.1% gains.

As such, we think investing in the following value ETFs could now be rewarding: Vanguard Small-Cap Value Index Fund ETF Shares (VBR), iShares S&P 500 Value ETF (IVE), iShares Russell 2000 Value ETF (IWN), and iShares Edge MSCI USA Value Factor ETF (VLUE).

Vanguard Small-Cap Value Index Fund ETF Shares (VBR)

VBR seeks to track the performance of the CRSP U.S. Small Cap Value Index, which measures the investment return of small-capitalization value stocks. The fund offers broad diversification as it holds close to 1,000 securities in total and does not allocate more than 0.5% of the total assets to any one security.

With $23.47 billion in AUM, VBR’s top holding is Vanguard Cash Management Market Liquidity Fund, which has a 1.03% weighting in the fund, followed by IDEX Corporation (IEX) at 0.52% and VICI Properties Inc. (VICI) at 0.50%. It has an expense ratio of 0.07%, which is much lower than the category average 0.65%. 

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Disclaimer: Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use, please ...

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