|
| |
There is good reason to believe that large value stocks will, in
the long run and on average, tend to have higher risk-adjusted returns than
large growth stocks. There are several similar-seeming investment options
available. Which is best?
The funds are listed in rough order of our overall preference.
Preferences are listed separately for use in
retirement accounts and for taxable accounts.
For a listing of our preferences in other asset classes, see
here.
Retirement Accounts (i.e., tax-deferred or tax-exempt accounts)
 | Invesco S&P 500 Value with Momentum ETF (SPVM).
E/R: 0.39%. This fund attempts to track the S&P 500 High
Momentum Value Index. This index starts with the S&P 500. It
takes the 40% most valuey stocks thereof. Then it ranks those by
momentum score. It takes the 50% with the highest momentum score.
Then it weights the remaining stocks by value-ness. This gives a very
valuey portfolio which also has some momentum exposure.
|
| Vanguard U.S. Value Factor ETF (VFVA). E/R: 0.13%. This ETF
Targets U.S. stocks with lower market valuations relative to fundamentals,
such as book value of equity and earnings. The stocks are weighted by
their "value-ness". The ETF is "actively managed", but it is
managed quantitatively, not speculatively.
|
| Avantis U.S. Large Value Fund (AVLVX).
E/R: 0.15%. This fund invests in US large-cap value stocks.
|
| DFA US Large Value Portfolio (DFLVX). E/R: 0.21%. This
fund is very valuey (as measured by weighted average book to
market value). It basically has a strategy of
emulating the returns of the
10% most valuey of the 90% of US publicly traded companies with the highest
market capitalization. This fund also has momentum and profitability
screens, which we judge to be desirable.
|
| Avantis U.S. Large Value ETF (AVLV).
E/R: 0.15%. This fund invests in US large-cap value stocks.
|
| DFA US Large Value ETF (DFLV). E/R: 0.22%. This
fund is very valuey (as measured by weighted average book to
market value). It basically has a strategy of
emulating the returns of the
10% most valuey of the 90% of US publicly traded companies with the highest
market capitalization. This fund also has momentum and profitability
screens, which we judge to be desirable.
|
| First Trust Dorsey Wright Momentum & Value ETF (DVLU).
E/R: 0.60%. This fund attempts to track the Dorsey Wright
Momentum Plus Value Index. This index starts with the NASDAQ
US Large Mid Cap Index. It removes those with the lowest
positive momentum. Then it ranks those remaining by value
score. It takes the 50 stocks with the highest value score and
weights them in a fashion which gives highest weight to those with
the highest value score. This gives a very valuey portfolio
which also has some momentum exposure. We don't like how
concentrated (and expensive) this fund is, compared with
alternatives.
|
| Invesco S&P 500 Enhanced Value Portfolio ETF (SPVU).
E/R: 0.13%. This fund attempts to track the S&P 500 Enhanced Value
Index. "The Index tracks the performance of stocks in the S&P 500
Index that have the highest 'value score.'" "Constituents are weighted
by their market capitalization and their value score." For more information on ETFs, see here.
|
| iShares Edge MSCI USA Value Factor ETF (VLUE). E/R: 0.15%. This ETF
tracks the MSCI USA Enhanced Value Index, which
tracks large and mid-cap US Value Stocks.
|
| Invesco S&P 500 Pure Value ETF (RPV).
E/R: 0.35%. This ETF tracks the S&P 500 Pure Value
Index. It is extremely valuey (as measured by weighted average
book to market value). Unlike virtually all other passively
managed funds, this fund isn't weighted by market cap, but rather by
"value-ness." RPV's measure of "value-ness" is not limited to
book-to-market ratio.
|
| iShares Factors US Value Style ETF (STLV).
E/R: 0.25%. This fund attempts to track the Russell US Large
Cap Factors Value Style Index. This index starts with the
Russell 1000 Value Index. It scores each stock in the Russell
1000 Value index on Momentum, Value, Quality, Low Volatility, and
Small measures. It weights those measures as follows: Momentum
20%, Value 25%, Quality 45%, Low Volatility 5%, and Small 5%.
It then uses an optimization process to select about 125 stocks and
weights them to maximize the portfolio's multifactor score while
having risk similar to the Russell 1000 Value Index. This
gives a very valuey portfolio which also has some momentum exposure.
|
| Alpha Architect U.S. Quant Value ETF (QVAL). E/R: 0.29%.
This ETF tracks the Alpha Architect Quantitative Value Index.
This index is very valuey and strong in exposure to profitability.
However, it is relatively undiversified.
|
| Fidelity Large Cap Value Index Fund (FLCOX).
E/R: 0.035%. This fund tracks the Russell 1000 Value Index. This
fund's low expense ratio is what makes it relatively attractive.
|
| Vanguard Value Index Fund Admiral Shares (VVIAX). E/R: 0.05%.
This
fund tracks the CRSP US Large Cap Value Index. While its expense
ratio is lower than DFLVX, the stocks it invests in are nowhere near as
valuey. This fund's low expense ratio is what makes it
relatively attractive.
|
| Vanguard Value ETF (VTV). E/R:
0.04%. This ETF is a share class of the Vanguard Value Index
Fund (VVIAX).
|
| SPDR S&P 500 Value Fund (SPYV).
E/R: 0.04%. This ETF tracks the S&P 500 Value index.
|
| iShares Core U.S. Value ETF (IUSV).
E/R: 0.04%. This ETF tracks the Russell 3000 Value stock
index, which tracks US Value Stocks of all market capitalizations.
|
| Vanguard Mega Cap 300 Value ETF (MGV).
E/R: 0.11%. This ETF is a share class of the Vanguard Mega Cap
300 Value Index Fund Institutional Shares (VMVLX). It attempts
to track the CRSP US Mega Cap Value Index of very large valuey
companies.
|
| Schwab U.S. Large-Cap Value ETF (SCHV).
E/R: 0.04%. This ETF tracks the Dow Jones U.S. Large-Cap Value
Total Stock Market Index.
|
| Vanguard Russell 1000 Value ETF (VONV).
E/R: 0.15%. This ETF is a share class of the Vanguard Russell
1000 Value Index Fund Institutional Shares (VRVIX).
|
| Vanguard S&P 500 Value ETF (VOOV).
E/R: 0.15%. This ETF is a share class of the Vanguard S&P 500
Value Index Fund Institutional Shares (VSPVX).
|
| JPMorgan U.S. Value Factor ETF (JVAL)..
E/R: 0.12%. This ETF tracks the JP Morgan US Value Factor
Index of large valuey sector-neutral US stocks.
|
| iShares MSCI USA Value Factor ETF (VLUE).
E/R: 0.15%. This ETF tracks the MSCI US Value Factor Index of
large valuey US stocks.
|
| iShares S&P 500 Value Fund (IVE).
E/R: 0.18%. This ETF tracks the S&P 500 Value index.
|
| iShares Russell Top 200 Value Fund (IWX).
E/R: 0.20%. This ETF tracks the Russell Top 200 Value index.
|
| iShares Russell 1000 Value Index Fund (IWD).
E/R: 0.25%. This ETF tracks the Russell 1000 Value index. |
| Invesco S&P 500 Value with Momentum ETF (SPVM).
E/R: 0.39%. This fund attempts to track the S&P 500 High Momentum
Value Index. This index starts with the S&P 500. It takes the
40% most valuey stocks thereof. Then it ranks those by momentum score.
It takes the 50% with the highest momentum score. Then it weights the
remaining stocks by value-ness. This gives a very valuey portfolio
which also has some momentum exposure. As an ETF, it is reasonable to
expect this fund to be perfectly capital gains tax efficient.
|
| Vanguard U.S. Value Factor ETF (VFVA).
E/R: 0.13%. This ETF Targets U.S. stocks with lower market valuations
relative to fundamentals, such as book value of equity and earnings.
It weights stocks by their "value-ness." The ETF is "actively
managed", but it is managed quantitatively, not speculatively.
|
| Avantis U.S. Large Value ETF (AVLV).
E/R: 0.15%. This fund invests in US large-cap value stocks.
|
| DFA US Large Value ETF (DFLV). E/R: 0.22%.
This fund is very valuey (as measured by weighted average book to
market value). It basically has a strategy of
emulating the returns of the
10% most valuey of the 90% of US publicly traded companies with the highest
market capitalization. This fund also has momentum and profitability
screens, which we judge to be desirable.
|
| First Trust Dorsey Wright Momentum & Value ETF (DVLU).
E/R: 0.60%. This fund attempts to track the Dorsey Wright Momentum
Plus Value Index. This index starts with the NASDAQ US Large Mid Cap
Index. It removes those with the lowest positive momentum. Then
it ranks those remaining by value score. It takes the 50 stocks with
the highest value score and weights them in a fashion which gives highest
weight to those with the highest value score. This gives a very valuey
portfolio which also has some momentum exposure. We don't like how
concentrated (and expensive) this fund is, compared with alternatives.
As an ETF, it is reasonable to expect this fund to be perfectly capital
gains tax efficient.
|
| Invesco S&P 500 Enhanced Value Portfolio ETF (SPVU).
E/R: 0.13%. This fund attempts to track the S&P 500 Enhanced Value
Index. "The Index tracks the performance of stocks in the S&P 500
Index that have the highest 'value score.'" "Constituents are weighted
by their market capitalization and their value score." For more information on ETFs, see here.
|
| iShares Edge MSCI USA Value Factor ETF (VLUE). E/R: 0.15%. This ETF
tracks the MSCI USA Enhanced Value Index, which
tracks large and mid-cap US Value Stocks.
|
| iShares Factors US Value Style ETF (STLV).
E/R: 0.25%. This fund attempts to track the Russell US Large Cap
Factors Value Style Index. This index starts with the Russell 1000
Value Index. It scores each stock in the Russell 1000 Value index on
Momentum, Value, Quality, Low Volatility, and Small measures. It
weights those measures as follows: Momentum 20%, Value 25%, Quality 45%,
Low Volatility 5%, and Small 5%. It then uses an optimization process
to select about 150 stocks and weights them to maximize the portfolio's
multifactor score while having risk similar to the Russell 1000 Value Index.
This gives a very valuey portfolio which also has some momentum and quality
exposure.
|
| Invesco S&P 500 Pure Value ETF (RPV).
E/R: 0.35%. This ETF tracks the S&P 500 Pure Value Index.
It is extremely valuey (as measured by weighted average book to market
value). Unlike virtually all other passively managed funds, this fund
isn't weighted by market cap, but rather by "value-ness." As an ETF,
it is reasonable to expect this fund to be perfectly capital gains tax
efficient.
|
| Alpha Architect U.S. Quant Value ETF (QVAL). E/R: 0.29%.
This ETF tracks the Alpha Architect Quantitative Value Index.
This index is very valuey and strong in exposure to profitability.
However, it is relatively undiversified. As an ETF, it is reasonable
to expect this fund to be perfectly capital gains tax efficient.
|
| iShares Core U.S. Value ETF (IUSV).
E/R: 0.04%. This ETF tracks the Russell 3000 Value stock index, which
tracks US Value Stocks of all market capitalizations.
|
| Vanguard Value Index Fund Admiral Shares (VVIAX). E/R: 0.05%.
This
fund tracks the CRSP US Large Cap Value Index. This fund's low expense ratio is what makes it
relatively attractive.
|
| Vanguard Value ETF (VTV). E/R: 0.04%.
This ETF is a share class of the Vanguard Value Index Fund (VVIAX).
However, unlike other non-Vanguard ETFs, this fund will be only as tax
efficient as its underlying fund — no more and no less.
|
| SPDR S&P 500 Value Fund (SPYV).
E/R: 0.04%. This ETF tracks the S&P 500 Value index.
|
| Vanguard Mega Cap 300 Value ETF (MGV).
E/R: 0.11%. This ETF is a share class of the Vanguard Mega Cap 300
Value Index Fund Institutional Shares (VMVLX). However, unlike other
non-Vanguard ETFs, this fund will be only as tax efficient as its underlying
fund — no more and no less. It attempts to track the CRSP US Mega Cap
Value Index of very large valuey companies.
|
| Schwab U.S. Large-Cap Value ETF (SCHV).
E/R: 0.04%. This ETF tracks the Dow Jones U.S. Large-Cap Value Total
Stock Market Index.
|
| Vanguard Russell 1000 Value ETF (VONV).
E/R: 0.15%. This ETF is a share class of the Vanguard Russell 1000
Value Index Fund Institutional Shares (VRVIX). However, unlike other
non-Vanguard ETFs, this fund will be only as tax efficient as its underlying
fund — no more and no less.
|
| Vanguard S&P 500 Value ETF (VOOV).
E/R: 0.15%. This ETF is a share class of the Vanguard S&P 500 Value
Index Fund Institutional Shares (VSPVX). However, unlike other
non-Vanguard ETFs, this fund will be only as tax efficient as its underlying
fund — no more and no less.
|
| JPMorgan U.S. Value Factor ETF (JVAL).
E/R: 0.12%. This ETF tracks the JP Morgan US Value Factor Index of
large valuey sector-neutral US stocks.
|
| iShares MSCI USA Value Factor ETF (VLUE).
E/R: 0.15%. This ETF tracks the MSCI US Value Factor Index of large
valuey US stocks.
|
| iShares S&P 500 Value Fund (IVE).
E/R: 0.18%. This ETF tracks the S&P 500 Value index.
|
| iShares Russell Top 200 Value Fund (IWX).
E/R: 0.20%. This ETF tracks the Russell Top 200 Value index.
|
| iShares Russell 1000 Value Index Fund (IWD).
E/R: 0.25%. This ETF tracks the Russell 1000 Value index.
|
This web page contains the current opinions of Eric E. Haas at the time it is
written—and such opinions are subject to change
without notice. This web page is intended to serve two purposes:
| To educate the public; and |
| To provide disclosure of Mr. Haas' opinions to prospective clients.
We believe that prospective clients are well-served by being made aware of
what they are buying—and what they are buying is advice
that is based on these opinions. |
We believe the information provided here to be useful and accurate at the time
it is written.
Information contained herein has been obtained from sources believed to be
reliable, but is not guaranteed.
No investor should invest solely on the basis of information listed here.
Before investing, it is important to consult each prospective investment's
prospectus and consider both its risk/return characteristics and its effect on
your overall portfolio.
This information is not intended to be a
substitute for specific individualized tax, legal, or investment planning
advice. Where specific advice is necessary or appropriate, Altruist
recommends consultation with a qualified tax adviser, CPA, financial planner, or
investment adviser. If you would like to discuss the rationale or support
for any particular idea expressed on this web page, feel free to
contact us. |
