A Smart Beta ETF That Enhances Value

“The S&P 500 Enhanced Value Index is more representative of a high conviction, more concentrated value strategy.  In that light, it is worthwhile to compare the returns of the value indices to those of actively managed large-cap value managers,” according to S&P Dow Jones.

Related: Smart Beta ETFs: The “Dream Diet” for Your Portfolio

SPVU holds 99 stocks, over 41% of which hail from the financial services sector. Consumer staples and consumer discretionary names combine for almost 28% of the ETF’s weight. At 12.8%, healthcare is the ETF’s only other double-digit sector allocation.

“Across all measurement horizons, more than half of the active large-cap value funds have trailed the two value indices.  It comes as no surprise that the percentage of active value funds underperforming the S&P 500 Enhanced Value Index tends to exceed those underperforming the broad-based S&P 500 Value across all time periods, given that the former has outperformed the latter across all measurement periods,” according to S&P.

Over 82% of SPVU’s holdings are large-caps and the biggest weights assigned to those holdings are around 4%.

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