As recession fears keep investors cautious in today’s market landscape, value has been supplanting growth as the go-to factor guiding their capital allocations. As such, it’s necessary to focus on funds that offer investors value-oriented plays.
“(Value) seems to have had a precipitous resurrection following years of significant underperformance,” said Maxwell Grinacoff, a derivatives and quantitative strategist at Macro Risk Advisors. “Investors probably feel that we found a floor in interest rates for the time being. As bonds have been unwound, so have bond-proxy like sectors, which drove momentum lower. In any crowded trade, you are going to see a massive unwind.”
Here are three exchange-traded funds (ETFs) to consider:
- Vanguard Value ETF (NYSEArca: VTV): seeks to track the performance of a benchmark index that measures the investment return of large-capitalization value stocks. The fund employs an indexing investment approach designed to track the performance of the CRSP US Large Cap Value Index, a broadly diversified index predominantly made up of value stocks of large U.S. companies. The advisor attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index.
- iShares Russell 1000 Value ETF (NYSEArca; IWD): seeks to track the investment results of the Russell 1000® Value Index (the “underlying index”), which measures the performance of large- and mid- capitalization value sectors of the U.S. equity market. The fund generally invests at least 90% of its assets in securities of the underlying index and in depositary receipts representing securities of the underlying index. It may invest the remainder of its assets in certain futures, options and swap contracts, cash and cash equivalents, as well as in securities not included in the underlying index, but which the advisor believes will help the fund track the underlying index.
- iShares S&P 500 Value ETF (NYSEArca: IVE): seeks to track the investment results of the S&P 500 Value IndexTM, which measures the performance of the large-capitalization value sector of the U.S. equity market. The fund generally invests at least 90% of its assets in securities of the underlying index and in depositary receipts representing securities of the underlying index. It may invest the remainder of its assets in certain futures, options and swap contracts, cash and cash equivalents, as well as in securities not included in the underlying index, but which the advisor believes will help the fund track the underlying index.
For more market trends, visit ETF Trends.
