With U.S. markets breaking into new record highs, more investors are concerned about pricey valuations in equities. Nevertheless, there are some sector exchange traded funds that look relatively cheap.
“Financials had the lowest relative valuations of any sector in Q2, based on its low price-to-earnings (P/E) and price-to-book (P/B) ratios. Telecom also looked compelling on a P/E basis, but mixed on other metrics,” according to Fidelity’s Quarterly Sector Update.
For instance, the Fidelity MSCI Financials Index ETF (NYSEArca: FNCL), which tries to reflect the performance of the MSCI USA IMI Financials Index, currently trades with a 15.2 price-to-earnings and a 1.3 price-to-book.
The Fidelity MSCI Telecommunication Services Index ETF (NYSEArca: FCOM), which reflects the performance of the MSCI USA IMI Telecommunication Services 25/50 Index, shows a 18.5 P/E and a 2.1 P/B.
Meanwhile, the S&P 500 Index is hovering around a 19.9 P/E and a 2.8 P/B.