3 Best Value ETFs To Invest In
Exchange-traded funds, or ETFs, have opened up a world of different strategies to retail investors. Passive investing in a widely diversified index, themed investments in different industries and technologies, as well as fundamental strategies like growth and value. Unlike mutual funds, which often have minimum investments and can’t be traded on public markets, ETFs offer unrivaled convenience to the average person.
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Value investing is an investment strategy that seeks out stocks that are – you guessed it – undervalued. It’s a pretty broad umbrella. Some value investors look for smaller stocks that the market has neglected, while others may look for distressed stocks that are trading at a bargain price (before Gamestop was a meme stock it was popular among this type of value investor). Sometimes value can be found in plain sight, like when Apple’s stock price was languishing in 2013. Whatever the specifics of the method, though, every value investor is trying to buy stocks for less than their intrinsic value.
If you’re interested in value investing but don’t have the time or inclination to research stocks on your own, value-oriented ETFs are a great way to get exposure to the strategy without having to put in the leg work yourself. Here are three of the best value ETFs to invest in.
1. SPDR Portfolio S&P 500 Value ETF (SPYV)
This value ETF limits itself to stocks within the S&P 500. While it’s rare for stocks of this size to be seriously undervalued, it does happen, and this ETF tilts its holdings in that direction. SPYV is a great way to get exposure to large-cap value stocks, and it has a rock-bottom expense ratio of just 0.04%.
2. Vanguard Mid-Cap Value ETF (VOE)
Vanguard is famous for its low-fee, passively managed ETFs, and their value funds are no exception. VOE has an expense ratio of 0.07% and offers a solid dividend yield over 2% as of April 2024. VOE is a good choice for investors that want to add smaller companies to their portfolio, as well as value investors that would also like a source of income.
3. Vanguard Small-Cap Value ETF (VBR)
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Another Vanguard ETF, VBR, holds more than 800 small-cap stocks, and again has a low expense ratio of 0.07%. Small-cap stocks tend to be more volatile and risky than bigger companies, but offer the potential for above-average returns through capital gains. As an added bonus, VBR also has a dividend yield over 2%.
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