With the economy showing signs of life, investors may want some cyclical positioning and some of those sectors are considered value destinations.
Enter the Focused Large Cap Value ETF (FLV). The Focused Large Cap Value ETF tries to achieve long-term returns through an investment process that seeks to identify value and minimize volatility. The fund is one of the actively managed non-transparent ETFs launched by American Century earlier this year.
FLV is one of the original active non-transparent exchange traded funds (ANTs) launched by American Century earlier this year.
Growth stocks may be seen as exorbitant and overvalued, causing some investors to favor value stocks, which are considered undervalued by the market. Value stocks tend to trade at a lower price relative to their fundamentals (including dividends, earnings, and sales). While they generally have solid fundamentals, value stocks may have lost popularity in the market and are considered bargain priced compared with their competitors.
Betting on Value With FLV
Value fans believe this time may be different for value stocks, pointing to improving measures of investment sentiment, abating fears of a recession, rebounding corporate profits, and lessening trade tensions between the U.S. and China. Furthermore, value stocks are now trading at some of their most attractive prices in years as the growth/value gap is as wide as it’s been in decades.
FLV includes companies attractively priced relative to their fair value and potential downside. Additionally, the management team incorporates fundamental research and downside analysis to manage risk, and dampen volatility, which should establish a risk/return profile for each stock helps lead to a higher probability of long-term outperformance.
With the growth/value gap as wide as it’s ever been, there are incredible opportunities for investors to jump into equities while the default maneuver in today’s market landscape is heading into safe-haven assets like bonds or precious metals. Investors, however, could be missing out.
As such, there are incredible opportunities for investors to jump into equities while the default maneuver in today’s market landscape is heading into safe-haven assets like bonds or precious metals. Investors, however, could be missing out.
FLV could be a way for advisors and investors to position for a value rebound by using a unique fund structure.
For more on active strategies, visit our Active ETFs Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.