ETFs With The Lowest Valuations

August 23, 2019

Low Valuation, High Yield

While emerging market ETFs make up most of the low-P/E list, there are a few of other names there. The ProShares Global Listed Private Equity ETF (PEX) is one of those. It holds a basket of private equity stocks from around the world, including the U.S., the U.K., France and Canada. Like many low-P/E ETFs, PEX has a hefty distribution yield of 5.6%.

Ironically, there is only one value ETF among the ETFs with the lowest P/E’s: the Alpha Architect International Quantitative Value ETF (IVAL).

IVAL selects its holdings from the developed ex-U.S. equity universe, using the EV/EBIT (enterprise value to earnings before interest and taxes) ratio as its measure of valuation. It holds the cheapest 10% of stocks from its universe.

Even according to the different valuation measure we are using—P/E—the ETF stands out as cheap, with a ratio of 8.6. Top holdings are from Japan, the U.K., Australia and Norway.

Rock-Bottom P/E’s For Commodity ETFs

Finally, rounding out the low valuation list are a handful of commodity-focused funds. The VanEck Vectors Coal ETF (KOL), the VanEck Vectors Steel ETF (SLX) and the aforementioned SPDR S&P Metals & Mining ETF (XME) all find themselves with rock-bottom P/E’s.

That’s not surprising. Commodities have been deeply out of favor amid ample supplies and slowing demand.

Some commodities, like coal, are even at risk of obsolescence as countries frantically cut back on their consumption of the fuel due to pollution and climate concerns. Given the dismal outlook for the industry, investors are unwilling to pay for shares of global coal producers. KOL has a P/E of only 6.1.

For a full list of low-P/E ETFs, see the table below. Also included is a list of funds with low price-to-book (P/B) ratios, another valuation metric often used by investors, which measures the price of a fund divided by its book value per share.

 

ETFs With The Lowest P/E Ratios

Ticker Fund P/E Ratio Distribution Yield
NGE Global X MSCI Nigeria ETF 5.08 5.45%
ERUS iShares MSCI Russia ETF 5.49 5.98%
FLRU Franklin FTSE Russia ETF 5.64 5.70%
PAK Global X MSCI Pakistan ETF 5.89 7.60%
KOL VanEck Vectors Coal ETF 6.13 4.52%
TUR iShares MSCI Turkey ETF 6.41 4.56%
RSX VanEck Vectors Russia ETF 6.66 6.28%
SLX VanEck Vectors Steel ETF 6.81 3.29%
TAO Invesco China Real Estate ETF 6.9 3.94%
FCA First Trust China AlphaDEX Fund 7.14 4.57%
CHIR Global X MSCI China Real Estate ETF 7.25 4.48%
CHIX Global X MSCI China Financials ETF 7.38 3.78%
PEX ProShares Global Listed Private Equity ETF 8.03 5.82%
RFEM First Trust RiverFront Dynamic Emerging Markets ETF 8.07 2.96%
CHIM Global X MSCI China Materials ETF 8.31 4.29%
XME SPDR S&P Metals & Mining ETF 8.46 1.51%
IVAL Alpha Architect International Quantitative Value ETF 8.59 4.21%
EYLD Cambria Emerging Shareholder Yield ETF 8.64 5.33%
EEMD AAM S&P Emerging Markets High Dividend Value ETF 8.69 5.95%
CHIE Global X MSCI China Energy ETF 8.72 4.71%

Source: ETF.com Screener, powered by FactSet

Email Sumit Roy at [email protected] or follow him on Twitter sumitroy2

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