Value-Hunting Among 3 Popular Value ETFs

The market has been in a value phase for the past 6 months which has been well documented by others. The regime change was heartily welcomed by almost all managers of value funds, both active and passive. This is because the previous 13 years have been relentlessly difficult for value managers in terms of relative performance. Since 2008. traditional value has underperformed significantly as illustrated in the chart below from ETF Trends reflecting shifts and cyclicality between 1993 and 2008 but runaway outperformance by growth stocks over value stocks until the regime shift last autumn.

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The six-month hook at the end of the chart was shown as a sign of hope and validation that the market may cycle back to value investing for the long-term. The belief in value investing is well-steeped in academic and practitioner literature and is supported by the ration of value-to-growth performance since 1926. On a cumulative basis, although the relative outperformance by value as declined precipitously from its overall high of greater than 1200 in 2008, it still maintains a significant advantage.

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If the market is now indeed in a value cycle that still has a long way to run, which value ETFs should an investor consider? This article compares 3 popular Value ETFs:

  1. VOOV, S&P 500 Value ETF by Vanguard
  2. IUSV, iShares Core S&P Value ETF by BlackRock
  3. FVAL, Fidelity Large Cap Value Factor ETF by Fidelity Investments

There are some subtle and important differences in each of the three for the time period ending 3/31/2021:

 

VOOV

IUSV

FVAL

VOO

YTD Return

10.73%

11.19%

10.88%

6.17%

1-Yr Return

50.24%

52.59%

61.48%

56.33%

3-Yr Return

11.71%

11.85%

14.06%

16.75%

5-Yr Return

12.17%

12.58%

N/A

16.35%

10-Yr Return

11.00%

11.17%

N/A

13.87%

Std. Deviation

19.62%

20.01%

20.70%

18.41%

Sharpe Ratio (3-Year)

0.57

0.59

0.61

0.90

# of Stocks

438

744

128

500

P/E Ratio

23.4x

23.9x

25.0x

29.5x

P/B Ratio

2.6x

2.6x

3.0x

4.2x

Div. Yield

2.2%

2.1%

1.6%

1.4%

Expense Ratio

0.10%

0.04%

0.29%

0.03%

Target Index

S&P 500 Value

S&P 900 Value

Fidelity US Value Factor

S&P 500

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Disclaimer: Always read the fact sheets and/or summary prospectus before buying any ETF.

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