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The Wall Street is hovering around record levels. The global market also remains equally sturdy on improving economic strength. Even after a hawkish Fed meeting in September, North Korea’s nuke-related tensions and consecutive hurricanes, Wall Street kept going steady. Hopes of materialization of Trump’s tax reform and decent economic recovery are making this possible (read: ETF Strategies to Benefit from North Korea Tensions).

Naturally, the latest equity market rally is not bereft of overvaluation worries. Goldman Sachs sees “no value anywhere in the market.” Even Goldman strategist David Kostin believes that “the market has not embedded a full expectation of tax reform” (read: Are We Nearing a Bear Market? ETFs to Lean on).

In this scenario, if the Trump administration fails to get the tax reform passed and oil price skids suddenly, the broader market may see a steep correction. On the other hand, Goldman believes that if the tax reform materializes, that could infuse $8 a share to earnings and send the S&P 500 to 2600 from the current level of 2550. Moreover, OPEC and other trading companies have started to believe that the oil market is finally rebalancing.

This implies that there is still a lot of hope in the market. Some equity strategists polled by Reuters also expect the ongoing eight-year bull run to hit the wall in 2018. So, there is still “some momentum left”. But it is better for investors to go for bargain or value ETFs.

As of now, the S&P 500-based ETF (SPY - Free Report) SPY has a P/E ratio of 18.67 times. Dow Jones-based ETF SPDR Dow Jones Industrial Average ETF (DIA - Free Report) has a P/E ratio of 17.8 times. Nasdaq 100-based ETF PowerShares QQQ ETF (QQQ - Free Report) has a P/E ratio of 22.19 and small-cap iShares Russell 2000 ETF (IWM - Free Report) has a P/E ratio of 20.16 times, as per etfdb.com.

Low P/E Value ETFs to Play

Below we highlight a few value ETFs that have P/E ratios lower than SPY, DIA, QQQ and IWM.

Cambria Global Value ETF (GVAL - Free Report) – P/E 8.07

The underlying Cambria Global Value Index targets stocks with strong value characteristics. The fund has an exposure to developed & emerging markets. No stock accounts for more 3.66% of the fund. The fund has about 85% focus in Europe.

PowerShares S&P 500 Enhanced Value Portfolio (SPVU - Free Report) -- P/E 13.03

The 93-stock fund looks to follow the S&P 500 Enhanced Value Index. The fund is heavy on the financial sector with about 42.7%. No stock accounts for more than 4.64% of the fund (read: Should You Buy Bank ETFs Before Earnings Release?).

Global X MSCI SuperDividend EAFE ETF (EFAS - Free Report) – P/E 13.22

The 50-stock fund tracks the MSCI EAFE Top 50 Dividend Index. Britain (21.44%), Australia (16.25%) and France (12.07%) are the top three countries of the fund. Financials account for about 34.61% of the fund followed by telecommunication services. No stock accounts for more than 2.58% of the fund.

Guggenheim S&P 500 Pure Value (RPV - Free Report) – P/E 14.41

The 107-stock fund looks to track the performance of the S&P 500 Pure Value Index. No stock takes more than 2.60% of the fund. Financials (36.97%), Consumer Discretionary (16.3%) and Health Care (10.89%) have a double-digit weight in the fund.

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