Nevertheless, potential investors should still look under the hood of these value stock ETFs as no two are created alike and offer varying performances.
For instance, Johnson explains that something like VTV, which is market-cap weighted, will have a low degree of tracking error relative to the broad market and still be highly correlated to the market. Consequently, VTV’s value bet may be somewhat diluted compared to other options like RPV where the value play is more concentrated. However, the greater value concentration means that RPV may be come with greater risks but potentially generate greater returns.
VTV tracks a broader portfolio of 324 value-oriented stocks, whereas RPV includes a smaller concentration of 112 components.
Max Chen contributed to this article.