Best value ETF for the fourth quarter of 2021

Value investing is the practice of identifying undervalued stocks to take advantage of the market’s underestimation of their intrinsic value. Usually, investors will focus on the fundamentals of companies and compare them with similar businesses to identify stocks that may be undervalued. Value exchange-traded funds (ETFs) allow investors to purchase a basket of value stocks with a single investment. ETFs can provide a more diversified value strategy investment method because your funds are spread across many stocks.

Key points

  • In the past year, the performance of value stocks has remained flat with the broader market.
  • The ETFs with the best 1-year tracking total return are RZV, KBWB and RFV.
  • The largest holdings of these ETFs are Veritiv Corp., Wells Fargo & Co. and Navient Corp. respectively.

There are 35 ETFs of different values ​​traded in the United States, excluding reverse and leveraged ETFs, and funds with assets under management (AUM) of less than US$50 million. For our list, InvestingClue defines value funds as smart beta funds that broadly follow a value factor strategy.

The total return of value stocks measured by the Standard & Poor’s 500 Value Index in the past 12 months was 31.4%, while the total return of the Standard & Poor’s 500 Index as of August 30 was 31.1%, and its performance was in line with the broader market. 2021. Based on the performance of the past year, the best performing value ETF is Invesco S&P SmallCap 600 Pure Value ETF (RZV). We studied the 3 best value ETFs below. All figures below are as of August 30, 2021.

  • Performance over one year: 73.2%
  • Expense rate: 0.35%
  • Annual dividend yield: 0.57%
  • 3-month average daily volume: 36,082
  • Assets under management: US$290.3 million
  • Date of establishment: March 1, 2006
  • Issuer: Invesco

RZV tracks the S&P SmallCap 600 Pure Value Index, which measures the performance of securities with value characteristics in the S&P SmallCap 600. The ETF invests at least 90% of its assets in the securities that make up the index, thereby providing exposure to small-cap stocks that rank among the top companies in many value indicators, including book value to price ratio, income to price ratio, and sales Ratio to price. The financial sector received the highest allocation in the fund, followed by industrial and consumer discretionary goods. The fund’s top three holdings include Veritiv Corp. (VRTV), a business-to-business (B2B) distribution company; CONSOL Energy Inc. (CEIX), a coal mining service provider; and Domtar Corp. (UFS), a global Manufacturer of uncoated cut sheet paper.

  • Performance over one year: 68.2%
  • Expense rate: 0.35%
  • Annual dividend yield: 1.84%
  • 3-month average daily volume: 1,982,026
  • Assets under management: USD 3 billion
  • Date of establishment: November 1, 2011
  • Issuer: Invesco

KBWB tracks the KBW Nasdaq Bank Index, which is a modified market capitalization weighted index of companies primarily engaged in the provision of banking services. ETFs usually invest at least 90% of their assets in the securities that make up the index, thereby providing exposure to U.S. securities of the National Monetary Center Bank, regional banks, and savings institutions. Nearly half of its holdings are large-cap value stocks. But the fund also invests in some mid-cap stocks and stocks that have both value and growth characteristics. The top three holdings of the fund are large financial services companies, including Wells Fargo (WFC), Bank of America (BAC) and JPMorgan Chase (JPM).

  • Performance over one year: 65.3%
  • Expense rate: 0.35%
  • Annual dividend yield: 1.02%
  • 3-month average daily volume: 19,471
  • Assets under management: US$163.1 million
  • Date of establishment: March 1, 2006
  • Issuer: Invesco

RFV tracks the S&P MidCap 400 Pure Value Index, which measures the performance of securities with strong value characteristics in the S&P MidCap 400 Index. The ETF invests 90% or more of its assets in the securities that make up the index, providing investors with exposure to mid-sized companies with high-value rankings. These rankings are determined based on several value indicators, including book value and price Ratio, revenue-price ratio and sales price ratio. The financial sector receives the largest allocation in the fund, followed by consumer discretionary goods and information technology. The top three holdings of the fund include Navient Corp. (NAVI), a provider of asset management and business processing services for education, healthcare, and government clients; Commercial Metals Co. (CMC), a steel and metal company Manufacturers and recyclers of products; and HollyFrontier Corp. (HFC), a refiner of petroleum products.

The comments, opinions and analysis expressed here are for reference only and should not be regarded as personal investment advice or advice on investing in any securities or adopting any investment strategy. Although we believe that the information provided here is reliable, we do not guarantee its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Due to the rapidly changing market and economic conditions, all comments, opinions and analyses contained in our content are presented on the date of publication and may change without notice. This material is not intended to provide a complete analysis of every important fact about any country, region, market, industry, investment or strategy.

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