There has been plenty of chatter regarding the struggles of the value factor, but heading into 2019, some market observers forecast a value resurgence. Through September 2018, the preceding decade represented the worst 10-year stretch for value stocks.
However, with value stocks expected to bounce back, investors may want to consider exchange traded funds that offer unique approaches to value, including the WisdomTree Earnings 500 Fund (NYSEArca: EPS).
EPS, which turns 12 years old next month, was among the first alternative index based or what we now consider smart beta index ETFs that helped provide investors an alternative to traditional market capitalization-weighted indices.
EPS targets an earnings-weighted index that screen for positive cumulative earnings over their most recent four fiscal quarter period and assigns weights to components to reflect the proportionate share of the aggregate learning’s each company generated, so those with greater earnings have larger weights. That gives the fund value and quality tilts.