Looking To Get Back Into Value? Try This ETF

  • Value factor is starting to shake off several years of slack performance
  • $9.4 billion iShares S&P 500 Value ETF (NYSEArca: IVE) has a 2.5% dividend
  • S&P 500 Value ETF showed a 14.62 price-to-earnings and a 1.65 price-to-book
  • S&P 500 Growth ETF has a 19.34 P/E and a 3.99 P/B
  • S&P 500 Index ETF was trading at a 16.7 P/E and a 2.34 P/B

The value factor is starting to shake off several years of slack performance to outpace its growth and momentum counterparts as investors yearn for safer destinations in 2016. That is proving to be good news for exchange traded funds such as the $9.4 billion iShares S&P 500 Value ETF (NYSEArca: IVE).

“It’s got a nice 2.5% dividend and when you are stuck in a trading range you want to be in value,” said Brock Moseley, president of Miracle Mile Advisors, of IVE in an interview with TheStreet.com.

As the market cools off and moves toward more stable growth, exchange traded funds that track the value style may outperform.

“Should economic conditions continue to stabilize, value stocks may be one of the bigger beneficiaries,” according to Russ Koesterich, Global Chief Investment Strategist and Head of the Model Portfolio & Solutions Business at BlackRock. “Value typically outperforms during periods when economic conditions are improving.”

Value stocks typically trade at cheaper prices relative to fundamental measures of value, such as earnings and the book value of assets. In contrast, growth stocks tend to run at higher valuations since investors expect rapid growth in those company measures.