More Complex Value Strategies
But among the top strategies, PWV, for instance, picks securities based on a 10-factor process, and weights them using a tiered scheme—one that often lends the portfolio a tilt toward tech names, according to our database. And as would be expected, the more complex strategies tend to cost more. PWV has an expense ratio that’s more than seven times that of VTV.
There are also strategies that aren’t vanilla at all, opting instead for alternative weighting schemes or even active management. Consider the three funds below:
- The First Trust Large Cap Value AlphaDex Fund (FTA) is a quant-based methodology that tends to tilt toward midcap names. FTA selects and weights S&P 500 value stocks based on fundamental factors including sales, book value and cash flows. The fund has $888 million in assets and comes with a 0.62% expense ratio.
- The Guggenheim S&P 500 Pure Value ETF (RPV) tracks a pure value index that relies on several style scores. It costs only 0.35% in expense ratio and has $804 million in assets.
- The SPDR MFS Systematic Value Equity ETF (SYV) is the actively managed fund in the group. With only $2.82 million in assets, and costing a hefty 0.60% in expense ratio—among the highest in the segment—SYV’s portfolio manager uses fundamental and quantitative models to pick undervalued stocks in an effort to beat the Russell 1000 Value Index.
These different flavors of value strategies deliver very different returns, as the year-to-date chart shows:
Charts courtesy of StockCharts.com
For a comprehensive list of value ETFs covering all market capitalization, check out our ETF.com Value ETF Channel.
Contact Cinthia Murphy at [email protected]