Value stocks have historically outperformed growth stocks, or companies with high earnings expectations, in almost every market over the long-haul. For instance, the MSCI USA Value Index has outperformed the MSCI USA Growth Index by an annualized 81 basis points since 1974 through September 2015.
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The $3.5 billion SCHV tracks the Dow Jones U.S. Large Cap Value Total Stock Market Index and holds almost 370 stocks. Over 20% of the ETF’s roster is dedicated to financials while a combined 28.2% goes to technology and consumer staples names.
“Investing in SCHV is not without risk. Just because valuations are getting stretched doesn’t necessarily mean the market is due for any type of correction. We are still in a bull market, and stocks could continue to roar higher, in both the near and long term. If investors were focused solely on value stocks in this scenario, they would under perform, as has been the case year to date,” notes Seeking Alpha.
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