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Using ETFs to Buy Deep Value Stocks

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  • (0:40) - Is Now The Time To Buy Into ETFs?
  • (6:10) - Finding The Right ETF For You: Tracey’s Top Picks
  • (17:30) - The Big Benefit of ETFs
  • (21:50) - Episode Roundup: ARKK, QVAL, DEEP, FOVL, RPV, VBR


Welcome to Episode #222 of the Value Investor Podcast

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.

ETF investing is hot in 2021 thanks to the incredible 2020 performance of ARK Investment’s ETFs, including its flagship ETF, ARK Innovation (ARKK - Free Report) .

The ARK ETFs are actively managed by firm founder Cathie Wood and her team of analysts.

You’ll pay a higher expense ratio for her expertise.

ARK Innovation has an expense ratio of 0.75%.

While ARK focuses on disruptive innovators, are there similar niche ETFs that investors can use to diversify their value holdings?

4 ETFs Focused on Deep Value Stocks

1.       Alpha Architect US Quant Value ETF (QVAL - Free Report) is fully automated but follows a quantitative, rules-based methodology to identify undervalued stocks. It normally owns between 40 and 50 stocks. It has an average forward P/E of 12.3.

2.       Roundhill Acquirers Deep Value ETF (DEEP - Free Report) shifted this ETF to small cap and micro cap companies as of Oct 26, 2020. It now has about 100 holdings. It has an average P/S ratio of 1.0.

3.       iShares Focused Value Factor ETF (FOVL - Free Report) is focused on large and mid-cap companies with value characteristics. Financial services are more than half the portfolio and it doesn’t own any healthcare. It’s more “focused” as it only owns 40 stocks. It has a forward P/E of 13.7.

4.       Invesco Pure Value ETF (RPV - Free Report) tracks the S&P 500 pure value index, so it’s going to own large cap companies. Financials are about 40%. And energy makes up 9.6%. It now owns 124 companies with an average P/B ratio of just 0.86.

Expense ratios are higher on all four of these ETFs compared to the basic value ETFs with hundreds of stocks run by companies like Vanguard.

They range from 0.25% to 0.8%.

Should value investors add a niche ETF to their portfolio?

Find out on this week’s podcast.

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Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>

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