Stock Trading: These two value ETFs offer prospects

Bear markets often provide opportunities for experienced investors. This year and lost 14.5% and 23.4%, respectively. Given the huge losses, the markets are starting to offer attractive entry points.

As such, it comes into focus for experienced investors to find quality stocks that trade below their intrinsic value and represent an important and lucrative long-term strategy. Net asset value refers to the actual value of a share, ie. or other asset) is really worth it.

According to Warren Buffett, the intrinsic value is:

“… the only logical way to assess the relative attractiveness of assets and companies.”

Quantitative measurements help assess whether a stock provides value. Examples of the most commonly used measurements are price-to-earnings (P / E), price-to-book (P / B) ratios, price-to-sales (P / S) ratios, price-to-earnings -to -growth (P / E;) key figures), debt to equity D / E and free cash flow (FCF).

What these measurements mean, or how they should be interpreted, requires further investigation and typically depends on the industry. InvestingPro shows the corresponding values ​​for equities, their peers and the industry in detail. So a price-to-earnings (P / E) ratio of around 20 for a technology stock could mean it is potentially interesting.

However, the same argument does not necessarily apply to supply stocks, where we see lower multiples. The NYU Stern School of Business publishes an updated list of price-to-earnings ratios for various sectors in the United States.

Today’s post focuses primarily on value stocks and highlights two exchange traded funds (ETFs) that invest in these stocks with good value propositions:

1. Vanguard S&P Mid-Cap 400 Value Index Fund ETF Equities

  • Current exchange rate: $ 152.32
  • 52 week interval: $ 151.77 – $ 176.31
  • Dividend percentage: 1.94%
  • Expenditure ratio: 0.15% pa

Our first fund, the Vanguard S&P Mid-Cap 400 Value Index Fund ETF Equities (NYSE :), invests in midcap value companies in the US from. Shares are selected based on three factors, including earnings-at-price, book-at-price and sale-at-price.

IVOV weekly chart

This passively managed fund was first launched in September 2010. It currently has a portfolio of 295 stocks, with the top ten stocks accounting for approximately 9% of the net value of $ 943 million.

Industrial companies account for the largest share of the sector allocation with 19.40%. It is followed by finance (17%), consumer goods (12.70%), real estate (11.30%) and information technology (10.40%).

Larger holdings include e.g. Medicinal properties (NYSE :), a real estate investment fund (REIT) specializing in healthcare facilities, financial services provider First Horizon National (NYSE :), the real estate and accident insurance company Alleghany (NYSE :), the metal service group dependence Steel & Aluminum Co. (SNEEZE:); and Aecom technology (NYSE :), which provides infrastructure consulting services.

After reaching a record high level in November 2021, IVOV came under pressure. The fund has fallen almost 9.6% since January and 9.7% over the last 12 months. The ratio between price and earnings (P / E) and price-to-book (P / B) is 14.0x and 1.9x, respectively.

Although the current environment is not very sunny for Wall Street, mid-cap value stocks have historically benefited in the long run against the backdrop of high and rising interest rates. Therefore, investors with a time horizon of three to five years could consider IVOV.

2. JPMorgan (NYSE 🙂 US Value Factor ETF

  • Current exchange rate: $ 34.44
  • 52 week interval: $ 34.41 – $ 39.27
  • Dividend percentage: 2.31%
  • Expenditure ratio: 0.12% pa

The next ETF on our list is this one JPMorgan US Value Factor ETF (NYSE :), which offers diversified exposure to major US corporations in this category from. The fund is invested in 340 shares selected for their relative value, including book returns, earnings, dividends and cash flow returns.

JVAL weekly chart

JVAL weekly chart

The JVAL ETF has been trading since November 2017. The portfolio’s top 10 stocks represent almost 17% of the $ 1.1 million in net assets. Among sectors, technology stocks are leading by 27.3%, followed by discretionary consumer (14.8%), healthcare (13.5%), industry (12.6%) and finance (10. 0.6%).

Key individual titles include United Health Group (SNEEZE:); Apple (NASDAQ :); Exxon mobile (SNEEZE:); Microsoft (NASDAQ :), and Johnson & Johnson (SNEEZE:).

We think JVAL is an interesting fund for value investors. JVAL hit a low of 52 weeks yesterday and has fallen by 10.3% since the start of 2022. The historical ratios between price and earnings (P / E) and price-to-book (P / B) are 13.10x and 2.35x, respectively.

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