4 Great ETFs Loaded With Value Stocks
Exchange-traded funds with a value tilt are another way to invest in the shift toward bargain stocks.
Just as mutual funds provide an opportunity to benefit from the revival in value stocks, so do these exchange-traded funds — but with even lower costs. You can find a basic ETF for value stocks of any size.
Consider SPDR S&P 400 Mid Cap Value ETF, which tracks the cheaper stocks in the S&P MidCap 400 index.
Symbol: MDVYExpense ratio: 0.15%Total return, year to date: 9.9%One-year total return: 0.6%Five-year annualized total return: 10.6%Ten-year annualized total return: 7.2%
Like your stocks big and cheap? Then go for Vanguard Value ETF, which follows an index created by the Center for Research in Security Prices and charges just 0.08% per year.
Symbol: VTVExpense ratio: 0.08%Total return, year to date: 7.4%One-year total return: 0.2%Five-year annualized total return: 10.9%Ten-year annualized total return: 7.2%
If you want a small-cap value ETF, use Vanguard Small-Cap Value ETF, which also tracks a CRSP index and charges the same 0.08% annually.
Symbol: VBRExpense ratio: 0.08%Total return, year to date: 5.5%One-year total return: 4.7%Five-year annualized total return: 11.5%Ten-year annualized total return: 6.4%
Or consider an ETF that seeks to beat a traditional index. PowerShares Dynamic Large Cap Value ETF tracks an enhanced index that screens for 10 factors, including historic earnings and sales growth and various valuation measures. The fund recently held 50 stocks, with AT&T, Verizon Communications and Johnson & Johnson at the top of the list.
Symbol: PWVExpense ratio: 0.57%Total return, year to date: 7.1%One-year total return: 3.6%Five-year annualized total return: 11.5%Ten-year annualized total return: 8.5%
PowerShares' expense ratio of 0.57% a year is well above the expense ratio for standard index-based ETFs. Although the fund is neck and neck with Vanguard Value over the past five years, the PowerShares ETF beat the Vanguard ETF by an average of 2.1 percentage points per year over the past 10 years.