Reconsidering Smart Beta Value ETFs

Another value ETF to consider is the ValueShares U.S. Quantitative Value ETF (BATS: QVAL). QVAL is managed by Dr. Wesley Gray, a U.S. Marine Corps veteran with a Ph.D. from the University of Chicago where studied under Nobel Prize winner, Eugene Fama. QVAL pursues its investment objective by investing primarily in U.S. equity securities the advisor believes to be the cheapest, highest-quality value stocks in the market.

Related: Smart Beta ETFs Don’t Have to Be Complex to Do Their Job

The value play may be seen as a basic type of enhanced or smart beta ETF strategy that specifically targets value stocks that tend to trade at a lower price relative to fundamentals, like dividends, earnings and sales. Along with the simple pure value play, such as RPV and QVAL, the other value-focused ETFs may also incorporate other factors in their screening process.

QVAL has “ust 40 holdings that are roughly equal weighted in the portfolio structure.  This allows for each stock to have a similar contribution to the total return of the fund rather than giving larger companies the lion’s share of the assets,” according to ETF Daily News.

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