Best Value ETFs for Q1 2022

Value investing is the practice of identifying undervalued stocks in an effort to capitalize on the market’s underestimation of their intrinsic value. Typically, investors look to a company’s fundamentals, comparing them against similar businesses in order to identify potentially undervalued stocks. Value exchange-traded funds (ETFs) allow investors to buy baskets of value stocks with a single investment. An ETF can offer a more diversified way to invest in a value strategy because your money is spread across many stocks.

There are 37 value smart beta ETFs that trade in the U.S., excluding inverse ETFs, leveraged ETFs, and ETFs with less than $50 million in assets under management (AUM). For the purposes of our list, Investopedia is defining value funds as smart beta funds that broadly follow a value factor strategy. Value stocks, as measured by the Russell 1000 Value Index, have underperformed the broader market over the past 12 months with a total return of 23% compared to the S&P 500’s total return of 28.9%, as of Dec. 9, 2022. The best-performing value ETF for Q1 2022, based on performance over the past year, is the Invesco KBW Bank Value ETF (KBWB).

We examine the 3 best value ETFs below. All numbers below are as of Dec. 11, 2021.

• Performance over 1-Year: 43.7%
• Expense Ratio: 0.35%
• Annual Dividend Yield: 1.79%
• 3-Month Average Daily Volume: 1,425,420
• Assets Under Management: $3.0 billion
• Inception Date: Nov. 1, 2011
• Issuer: Invesco

KBWB tracks the KBW Nasdaq Bank Index, a modified-market capitalization-weighted index of companies primarily engaged in providing banking services. The ETF typically invests at least 90% of its assets in the securities that comprise the index, providing exposure to publicly traded U.S. securities of national U.S. money center banks, regional banks, and thrift institutions. Over 50% of its holdings are large-cap value and large-cap blend stocks. The fund also invests in mid-cap and small-cap stocks. The fund’s top three holdings are major financial services companies, including Wells Fargo & Co. (WFC), which provides personal, small business and commercial banking; Bank of America Corp. (BAC), which provides banking, investing and other non-bank services; and JPMorgan Chase & Co. (JPM), a financial holding company.

• Performance over 1-Year: 42.9%
• Expense Ratio: 0.35%
• Annual Dividend Yield: 0.64%
• 3-Month Average Daily Volume: 27,440
• Assets Under Management: $312.5 million
• Inception Date: March 1, 2006
• Issuer: Invesco

RZV tracks the S&P SmallCap 600 Pure Value Index, which measures the performance of securities with value characteristics within the S&P SmallCap 600. The ETF invests at least 90% of its assets in the securities that make up the index, providing exposure to small-cap companies that rank high among a number of value metrics, including book value-to-price ratio, earnings-to-price ratio, and sales-to-price ratio. The highest allocations within the fund include industrial and financial companies. The fund’s top three holdings include Veritiv Corp. (VRTV), a business-to-business (B2B) distribution company; CONSOL Energy Inc. (CEIX), a provider of coal mining services; and Green Plains Inc. (GPRE), a producer of fuel-grade ethanol and corn oil.

Invesco S&P MidCap 400 Pure Value ETF (RFV)

• Performance over 1-Year: 31.9%
• Expense Ratio: 0.35%
• Annual Dividend Yield: 1.19%
• 3-Month Average Daily Volume: 10,429
• Assets Under Management: $153.1 million
• Inception Date: 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 within the S&P MidCap 400 Index. The ETF invests 90% or more of its assets in securities that comprise the index, providing investors with exposure to mid-cap companies with high value rankings based on several value metrics, including book value-to-price ratio, earnings-to-price ratio, and sales-to-price ratio. The financials sector receives the largest allocation within the fund, followed by consumer discretionary and information technology. The fund’s top three holdings include Unum Group (UNM) which provides insurance products and services; Navient Corp. (NAVI), a provider of asset management and business processing services to education, healthcare, and government clients; and Auto Nation Inc. (AN), a retail automotive franchise company.

The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

View Article Origin Here