3 Value-Focused Small Caps to Consider Right Now

Not everybody has the time to analyze stocks like many institutional investors. Thankfully, several funds can give investors exposure to the value factor through the convenience of an ETF wrapper.

“Investing in value stocks takes hard work and lots of research. Once you’ve found value stocks, be prepared to buy and hold them for longer periods of time,” a Forbes article explained. “Deploying fundamental analysis to find value stocks and learn their intrinsic value always begins with research. The best online brokerage platforms offer stock screeners that let you compare stocks using basic concepts like aspects of businesses’ fundamentals. You may want to consider any or all of the following, but be aware that no single factor alone identifies a good value stock.”

The growth versus value argument always comes up in conversations regarding factors. So far, using the MSCI ACWI indexes, value is edging out growth in 2021.


Value in Small Caps

Small caps are known to provide investors with growth opportunities, but the value factor can also be successfully applied to these equities. With a keen eye on value, here are three ETFs to consider with a tilt toward small caps:

  1. Invesco S&P SmallCap 600 Pure Value ETF (RZV): seeks to track the investment results of the S&P SmallCap 600® Pure Value Index. The underlying index is composed of a subset of securities from the S&P SmallCap 600® Index that exhibit strong value characteristics.
  2. Vanguard S&P Small-Cap 600 Value Index Fund ETF Shares (VIOV): seeks to track the performance of a benchmark index that measures the investment return of small-capitalization value stocks in the United States. The fund employs an indexing investment approach designed to track the performance of the S&P SmallCap 600® Value Index, which represents the value companies, as determined by the index sponsor, of the S&P SmallCap 600 Index. 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.
  3. SPDR S&P 600 Small Cap Value ETF (SLYV): seeks to provide investment results that correspond generally to the total return performance of the S&P SmallCap 600 Value Index. The index measures the performance of the small-capitalization value segment of the U.S. equity market. It may purchase a subset of the securities in the index in an effort to hold a portfolio of securities with generally the same risk and return characteristics of the index.

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