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The Zacks Analyst Blog Highlights FLV, IWS, HVAL, STLV and MDYV.
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For Immediate Release
Chicago, IL – April 6, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: American Century Focused Large Cap Value ETF (FLV - Free Report) , iShares Russell Mid-Cap Value ETF (IWS - Free Report) , ALPS Hillman Active Value ETF , iShares Factors US Value Style ETF and SPDR S&P 400 Mid Cap Value ETF (MDYV - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Yield Curve Inverts: Which Value ETFs Should You Buy Now?
The bond market continued to offer worrying signals that the U.S. economy could be headed for a recession after U.S. Treasury yields inverted again this week. With the Fed rate hikes likely to be aggressive in the coming days on mounting inflation and uncertainties prevailing due to the Russia-Ukraine war, investors piled into value investing.
Value stocks have a low price-to-book ratio (P/B)— a measure of market cap relative to tangible assets, per a Wall Street Journal article. The lower the price-to-book ratio, the higher the value. This makes them a gem-like bet amid economic uncertainties. Plus, most value ETFs are financial sector-heavy and perform better in a rising rate environment.
But what would be your stance when the yield curve is inverted? Notably, financial stocks have been going through a rough patch with Financial Select Sector SPDR ETF and SPDR S&P Bank ETF losing about 3% and 4.1%, respectively, last week (read: Fearing an Inverted Yield Curve? Short Financials With ETFs).
The scenario is the same this week also. The yield on the 2-year Treasury yield fell marginally to 2.424%, while the benchmark 10-year Treasury note rose about 4 basis points to 2.412%. The yield on the 5-year government bond went up by 1 basis point to 2.56% on Monday. The scenario indicates that long-term bond yields are at pressure.
As a result, it is better to be choosy now while picking value ETFs. Value ETFs that are less dependent on financials and more focused on other areas like utilities, staples, real estate and energy should do well in the current environment. In fact, information technology is also delivering great results currently due to lower long-term bond yields.
Against this backdrop, below we highlight a few value ETFs that could be beneficial in the current environment.
ETFs in Focus
American Century Focused Large Cap Value ETF
While Financials take about 25% of the fund weight, Healthcare fetched about 25% too. Consumer Staples and industrials get about 14% and 11%, each, respectively. The fund charges 42 bps in fees.
iShares Russell Mid-Cap Value ETF
The fund gives exposure to mid-sized U.S. companies that are thought to be undervalued by the market relative to comparable companies. The fund charges 23 bps in fees. Financials get only 16.3% while Industrials (14%) and Real Estate (11.64%) receive the next two spots. Information Technology gets about 9.33% of the ETF IWS.
ALPS Hillman Active Value ETF
The fund looks to invest in companies that have sustainable competitive advantages, at times when we calculate that their stocks are undervalued. Financials do not have much weight here with healthcare, communication services, consumer staples and industrials taking the top four spots and double-digit weights.
iShares Factors US Value Style ETF
The underlying Russell US Large Cap Factors Value Style Index selects equity securities from the Russell 1000 Value Index with exposure to momentum, quality, value, size, and low volatility while maintaining a level of risk similar to that of the Russell 1000 Value Index. Financials have 23% weight in the fund, but Health Care (16.80%), Information Technology (10.97%) and Consumer Staples (10.24%) also possess decent weights.
SPDR S&P 400 Mid Cap Value ETF
The underlying S&P MidCap 400 Value Index measures the performance of the mid-capitalization value sector in the U.S. equity market. Industrials (19.26%), Consumer Discretionary (12.83%), Real Estate (11.37%) and Information Technology (10.29%) have a double-digit weight in the fund, while financials take about 16.92% of the fund weight.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights FLV, IWS, HVAL, STLV and MDYV.
For Immediate Release
Chicago, IL – April 6, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: American Century Focused Large Cap Value ETF (FLV - Free Report) , iShares Russell Mid-Cap Value ETF (IWS - Free Report) , ALPS Hillman Active Value ETF , iShares Factors US Value Style ETF and SPDR S&P 400 Mid Cap Value ETF (MDYV - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Yield Curve Inverts: Which Value ETFs Should You Buy Now?
The bond market continued to offer worrying signals that the U.S. economy could be headed for a recession after U.S. Treasury yields inverted again this week. With the Fed rate hikes likely to be aggressive in the coming days on mounting inflation and uncertainties prevailing due to the Russia-Ukraine war, investors piled into value investing.
Value stocks have a low price-to-book ratio (P/B)— a measure of market cap relative to tangible assets, per a Wall Street Journal article. The lower the price-to-book ratio, the higher the value. This makes them a gem-like bet amid economic uncertainties. Plus, most value ETFs are financial sector-heavy and perform better in a rising rate environment.
But what would be your stance when the yield curve is inverted? Notably, financial stocks have been going through a rough patch with Financial Select Sector SPDR ETF and SPDR S&P Bank ETF losing about 3% and 4.1%, respectively, last week (read: Fearing an Inverted Yield Curve? Short Financials With ETFs).
The scenario is the same this week also. The yield on the 2-year Treasury yield fell marginally to 2.424%, while the benchmark 10-year Treasury note rose about 4 basis points to 2.412%. The yield on the 5-year government bond went up by 1 basis point to 2.56% on Monday. The scenario indicates that long-term bond yields are at pressure.
As a result, it is better to be choosy now while picking value ETFs. Value ETFs that are less dependent on financials and more focused on other areas like utilities, staples, real estate and energy should do well in the current environment. In fact, information technology is also delivering great results currently due to lower long-term bond yields.
Against this backdrop, below we highlight a few value ETFs that could be beneficial in the current environment.
ETFs in Focus
American Century Focused Large Cap Value ETF
While Financials take about 25% of the fund weight, Healthcare fetched about 25% too. Consumer Staples and industrials get about 14% and 11%, each, respectively. The fund charges 42 bps in fees.
iShares Russell Mid-Cap Value ETF
The fund gives exposure to mid-sized U.S. companies that are thought to be undervalued by the market relative to comparable companies. The fund charges 23 bps in fees. Financials get only 16.3% while Industrials (14%) and Real Estate (11.64%) receive the next two spots. Information Technology gets about 9.33% of the ETF IWS.
ALPS Hillman Active Value ETF
The fund looks to invest in companies that have sustainable competitive advantages, at times when we calculate that their stocks are undervalued. Financials do not have much weight here with healthcare, communication services, consumer staples and industrials taking the top four spots and double-digit weights.
iShares Factors US Value Style ETF
The underlying Russell US Large Cap Factors Value Style Index selects equity securities from the Russell 1000 Value Index with exposure to momentum, quality, value, size, and low volatility while maintaining a level of risk similar to that of the Russell 1000 Value Index. Financials have 23% weight in the fund, but Health Care (16.80%), Information Technology (10.97%) and Consumer Staples (10.24%) also possess decent weights.
SPDR S&P 400 Mid Cap Value ETF
The underlying S&P MidCap 400 Value Index measures the performance of the mid-capitalization value sector in the U.S. equity market. Industrials (19.26%), Consumer Discretionary (12.83%), Real Estate (11.37%) and Information Technology (10.29%) have a double-digit weight in the fund, while financials take about 16.92% of the fund weight.
Want key ETF info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.