A Smart Beta Value ETF With a Nominal Fee

Some market observers expect the value factor will make a comeback in the second half of 2017 after lagging growth and momentum in the first half. Investors can access value stocks with an array of exchange traded funds, including low-fee products such as the Schwab U.S. Large-Cap Value ETF (NYSEArca: SCHV).

SCHV charges just 0.04% per year, or $4 on a $10,000 investment, making it one of the cheapest value ETFs on the market. Investors can realize additional cost savings with SCHV by trading the ETF on Schwab’s ETF OneSoure platform, the largest commission-free ETF menu in the brokerage industry.

Value stocks usually trade at lower prices relative to fundamental measures of value, like earnings and the book value of assets. On the other hand, growth-oriented stocks tend to run at higher valuations since investors expect the rapid growth in those company measures, but more are growing wary of high valuations, especially as the U.S. equities market moves toward the ninth year of an extended bull run.

SCHV “attempts to hold the same proportions of its stocks as its weightings in the index and is managed by Schwab. SCHV is currently trading at $50.84/share, and its most recent quarterly dividend was $.31/share. Based on this payment, the fund is yielding 2.44% annually. Once dividends are accounted for, the year-to-date return of SCHV comes in at about 7%, which lags the Dow Jones Index and S&P 500, which are up 9% and 10.5% for the year, respectively,” according to a Seeking Alpha analysis of the ETF.