In this week’s episode of the “ETF of the Week” podcast, VettaFi Head of Research Todd Rosenbluth joined Chuck Jaffe of Money Life to discuss the BNY Dynamic Value ETF (BKDV).
Chuck Jaffe: One fund, on point for today. The expert to talk about it. This is the ETF of the Week.
Welcome to the ETF of the Week, where we examine trending, new, newsworthy, unique, and intriguing exchange traded funds with Todd Rosenbluth, head of research at VettaFi, and at VettaFi.com, You’ll find all the tools and research you need to make yourself a savvier, smarter investor in exchange traded funds. Todd Rosenbluth, it’s great to chat with you again.
Todd Rosenbluth: It’s great to be back.
Jaffe: Your ETF of the Week is?
Rosenbluth: The BNY Dynamic Value ETF (BKDV).
Jaffe: BKDV, the BNY Dynamic Value ETF. Now, Todd, you have a market that’s back at record-high levels. And at record-high levels, it can be tough to find values. So why value, and why this specific value fund now?
Rosenbluth: Well, you covered some of that. Yes, the market’s rallied. We think an actively managed ETF, which is what this fund is, that has a valuation consideration, is worth taking a closer look at.
On the opening, you talked about new and newsworthy. This is a new and, to me, a newsworthy ETF. It launched at the end of last year. It already has over $350 million in assets. It’s outperforming the value index products that are tied to the Russell 1000 Value Index. And this is based on a strategy [from]the same managers of a fund that is very successful from BNY that’s five-star-rated. This is an ETF version of that strategy. We think investors should take a closer look at the ETF.
Jaffe: When ETFs started, they were always passive ETFs. Then they became rules-based, and smart beta, and things like that. And now we’ve seen the full conversion from a lot of traditional funds, at least where they have an ETF sister.
So when you evaluate a fund like this — again, new fund, ETF structure — but has that established sister, if somebody says I don’t like to buy new funds and even though this one passes some of the tests with $300 million, etc., would you look at the track record of the traditional fund if you wanted to see how this fund has done long term? Do you look at that and say, “OK, I should get these kinds of results only with better expenses, so that should be even better?”
Rosenbluth: I think you certainly can, and should take a closer look at what else is run by the same firm with the same, in this case, a subadvisor or management team in place, where the way that BNY is positioning this strategy, is it’s a different wrapper.
So there’s an ETF, there’s a mutual fund. There’s also a separately managed account. I think that helps to give comfort for a fund that is less than a year old. And there are some people who will wait till a fund is more than a year old to be able to judge it and consider investing in it. This BKDV product has, as we mentioned, over $350 million.
And you touched on earlier, so let me bounce to it, we’re seeing a growing number of products. We’re seeing growing demand as well. Roughly 40% of the net inflows into ETFs in the first half of 2025 were to actively managed ETFs. They’re roughly 10%-12% of the overall asset pie. So it’s certainly punching above the weight for active ETFs. This is a good example of a fund that has garnered interest relatively early out of the gate.
Jaffe: This is a fund that does get you what you want out of active management, from the standpoint that it’s got names that you’re going to recognize. But it certainly is not an index fund type of weightings and allocations. It tilts a little bit. Talk about dynamic value and how that works. Because value is in the eye of the beholder. Why does this version of value work for you as opposed to maybe classic value, etc.?
Rosenbluth: So value is in the eye of the beholder. And so any actively managed ETF that takes value into consideration is going to likely be slightly different from one another, and based on the criteria that you use. And you’re right, this holds stocks in many cases that investors would be familiar with.
As I look at the top 10 holdings, JPMorgan Chase (JPM) and Berkshire Hathaway (BRK.B) and Johnson and Johnson (JNJ), those are examples of some traditional value-oriented stocks. I’m intrigued to see AT&T (T) within a top 10 holding. That’s a stock I’ve certainly been familiar with, for decades, but is not as large a weighting, I think, within the broader index.
So you’re getting exposure to communication services. Medtronic (MDT), a healthcare stock is in here, Cisco Systems (CSCO), so you do get some technology exposure. This is going to sort through the universe, it’s going to be different than an index. And it’s working. It’s outperformed the index by about roughly 200 basis points through the first half of the year.
Jaffe: It does have a little bit more than 30% of its portfolio in financials. So this is a portfolio construction kind of question. We’ve always known you don’t want to have too many funds that do the same thing. Because that leads to what’s called a closet index fund. You get a couple of funds, they trade with each other, you pay the expenses for the trading costs. But the performance you get is basically that of the index.
But given that this fund has that dynamic value approach, if somebody already has a value fund, is it OK to add a second one, provided they take a look and recognize that the fund they have maybe isn’t as heavy in financials as this one is, or their value approach is different from the dynamic value approach. How does this play with its siblings?
Rosenbluth: Financials tends to be a sector that’s heavily weighted within value strategies. So, I’m not surprised to see that within this BNY ETF. But to your point of can this play well with other ETFs, or at least that’s how I heard your point, if you owned an index-based value strategy and you wanted to have this, you could add this on top of that strategy, so you didn’t take on too much security risk. And you had a combination of an active and passive approach to value investing.
You might also have a highly concentrated value strategy. There are some of those that are out there. And then this could be a more diversified version of an active strategy. Because this fund has some diversification. The largest positions are roughly 4% of the overall portfolio, so it isn’t that concentrated. Overall, I think you can play this well with other ETFs.
Jaffe: I would assume that this is the kind of thing you’re really only adding to your portfolio if you’re committed for a while. But while anybody can trade in and out, this is not meant to be a trading vehicle. Yes, it’s above its 200-day moving average — now that it’s been around long enough to have one — but this is an allocation and a management decision. You’ll want this in your portfolio or you don’t want this in your portfolio. You’re not buying it because it’s hot.
Rosenbluth: Correct. I think of BKDV as a potential strategic position within a portfolio, BNY has some thematic ETFs. They have a global infrastructure product that comes to mind that is perhaps more targeted and more tactical for the right environment that we’re in. And we’ve certainly talked about other thematic ETFs or risk- on or risk-off ETFs. I think of BKDV as a strong strategic position that could serve within the core of a broadly diversified portfolio.
Jaffe: So yes, if you’re going to look at it, think of it as a potential core holding its BKDV, the BNY Dynamic Value Fund, the ETF of the Week from Todd Rosenbluth at VettaFi. Todd, always great to chat with you. See you again next week.
Rosenbluth: See you soon, Chuck.
Jaffe: The ETF of the Week is a joint production of VettaFi and Money Life with Chuck Jaffe. And I am Chuck Jaffe. I’d love it if you check out my hour-long weekday podcast. So go to MoneyLiveShow.com, or look for it wherever you find your favorite podcast.
If you’re searching for information on your favorite or your next great ETF, whether it’s BKDV, or any other fund, go to VettaFi.com, where they’ve got the full suite of tools that will help you learn more, and make yourself a better investor.
They’re on X @Vetta_Fi and Todd Rosenbluth, their head of research, my guest, he’s on X as well. He’s at @ToddRosenbluth. The ETF of the Week is here for you every Thursday. Make sure you don’t miss an episode by following or subscribing on your favorite podcast app. And we’ll be back with another ETF for you to consider next week.
Until then, happy investing, everybody.
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