In a market laden with uncertainty, it leaves factor-based strategies open for discussion and one recurring them is whether growth or value will reign moving forward. Some of the most staunch supporters of value investing are making its case as the best strategy given the discounted value of many equities following the pandemic sell-off.
“Of course, this bunch was talking their books, and value adherents are forever predicting a turnaround for their beloved investing style,” a Chief Investment Officer article noted. “But it’s also true that value, in the dumps for years as growth-oriented tech stocks soared, comes back eventually. The eight money managers on the panel tackled some of the industries that are on their backs and weren’t afraid of knocking some of their prospects.”
“Value will have an explosive upside,” said John Rogers, co-CEO of Ariel Investments,
For ETF investors looking for value plays, one ETF play that’s worth a look involves sifting through the Nasdaq to find value via the Principal Contrarian Value Index ETF (PVAL). PVAL seeks to provide investment results that closely correspond, before expenses, to the performance of the Nasdaq U.S. Contrarian Value Index (the “index”).
Under normal circumstances, the fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies that compose the index at the time of purchase. The index uses a quantitative model designed to identify equity securities in the Nasdaq US Large Mid Cap Index (the “parent index”) that appear to be undervalued by the market relative to their fundamental value.
Another option to consider is the American Century STOXX U.S. Quality Value ETF (VALQ). VALQ seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the iSTOXX® American Century USA Quality Value Index (the underlying index). Under normal market conditions, the fund invests at least 80% of its assets in the component securities of the underlying index. The underlying index is designed to select securities of large- and mid-capitalization companies that are undervalued or have a sustainable income.
One more value-titled fund to consider is the Invesco Dynamic Large Cap Value ETF (PWV). PWVseeks to track the investment results (before fees and expenses) of the Dynamic Large Cap Value IntellidexSM Index. The fund generally will invest at least 90% of its total assets in the securities that comprise the underlying intellidex. The underlying intellidex is composed of large-capitalization U.S. value stocks that the Intellidex Provider includes principally on the basis of their capital appreciation potential.
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