The Russia-Ukraine war, skyrocketing crude oil and natural gas prices, surging inflation, and the likelihood of aggressive interest rate hikes by the Federal Reserve this year continue to hang like a pall over the stock market.
After the Fed revealed its plans to increase the interest rates aggressively to tame the high inflation, the five-year U.S. Treasury yield hit 3% on Friday. The market downturn has led to many quality stocks trading at attractive valuations.
Since value stocks generally perform well in high-inflation periods, we think it could be wise to invest in Vanguard Value ETF (VTV), iShares Russell 1000 Value ETF (IWD), iShares S&P 500 Value ETF (IVE), iShares Edge MSCI USA Value Factor ETF (VLUE), and SPDR Series Trust SPDR Portfolio S&P 500 Value ETF (SPYV), which offer significant exposure to quality value stocks.
Vanguard Value ETF (VTV)
VTV is connected to the MSCI US Prime Market Value Index, which offers exposure to large-cap companies that have value characteristics within the U.S. equity market. Long-term investors can consider the importance of large-cap value stocks and the benefits they can add to any well-balanced portfolio, including dividends and rock-solid stability.
With $104.02 billion in assets under management, VTV's top holdings include Berkshire Hathaway Inc. Class B (BRK.B) with a 3.38% weighting; UnitedHealth Group Incorporated (UNH) at 2.63%; and Johnson & Johnson (JNJ) at 2.55%. Over the past month, the ETF's fund flows were $308.56 million. In addition, its 0.04% expense ratio compares favorably to the 0.49% average for its industry category.
Closing the last trading session at $145.28, the ETF is currently trading below its 52-week high of $151.89. VTV's NAV stands at $145.27. The fund has a five-year monthly beta of 0.96, indicating less volatility than the broader market. Also, the fund has gained 7.4% in price over the past year and 5.1% over the past nine months.
VTV's POWR Ratings reflect this promising outlook. The ETF has an overall A rating, which equates to Strong Buy in our proprietary rating system.
VTV has an A grade for Trade and Buy & Hold and a B for Peer. Among the 86 ETFs in the A-rated Large Cap Value ETFs group, VTV is ranked #1.
iShares Russell 1000 Value ETF (IWD)
The ETF is linked to the Russell 1000 Value Index, which offers exposure to large-cap companies that exhibit value characteristics within the U.S. equity market.
The fund has approximately $57.24 billion in assets under management (AUM). BRK.B is IWD’s top holding, with a 3.03% weighting, followed by JNJ and UNH, with 2.30% and 2.27% weightings, respectively.
IWD has an expense ratio of 0.19% versus the category average of 0.49%. The fund has gained 3.3% over the past year and 1.9% over the past nine months.
Closing the last trading session at $161.96, the ETF is currently trading below its 52-week high of $170.69. IWD's NAV stands at $161.89.
It is no surprise that IWD has an overall A rating, which translates to Strong Buy in our POWR Ratings system. It also has an A for Trade grade and Buy & Hold grade. In addition, it is currently ranked #2 in the Large Cap Value ETFs group. In addition, one can access IWD's Peer grade here.
iShares S&P 500 Value ETF (IVE)
IVE is linked to the S&P 500/Citigroup Value Index, which provides exposure to large-cap companies that have value characteristics within the U.S. equity market. Investors with a longer-term horizon should consider the importance of large-cap value stocks and the benefits they can add to any well-balanced portfolio, including dividends and rock-solid stability.
The fund has $25.71 billion in assets under management. Its top holdings are BRK.B with a 3.31% weighting; JNJ at 2.51%; and Procter & Gamble Company (PG) at 2.03%. IVE's 0.18% expense ratio compares with the 0.49% category average.
Closing the last trading session at $152.87, the ETF is currently trading below its 52-week high of $159.80. IVE's NAV stands at $152.70. The fund has a five-year monthly beta of 0.98, indicating less volatility than the broader market. The fund has gained 5% over the past year and 3.4% over the past nine months.
IVE's POWR Ratings are consistent with its promising outlook. The ETF has an overall A rating, which equates to Strong Buy in our proprietary rating system. It also has an A for Trade grade and Buy & Hold grade. In the Large Cap Value ETFs group, it is ranked #5. One can also access IVE's Peer grade here.
iShares Edge MSCI USA Value Factor ETF (VLUE)
VLUE tracks an index of large- and mid-cap U.S. equities. Stocks are selected and weighted using fundamental metrics (earnings, revenue, book value, and cash earnings), with the goal of exposure to undervalued stocks in each sector.
With $12.74 billion in assets under management, VLUE's top holdings include Intel Corporation (INTC) with a 5.98% weighting; AT&T Inc. (T) at 5.82%; and Cisco Systems, Inc. (CSCO) at 3.39%. In addition, its 0.15% expense ratio compares favorably to the 0.37% category average.
Closing the last trading session at $102.37, the ETF is currently trading slightly below its 52-week high of $114.62. VLUE's NAV stands at $101.95.
It is no surprise that VLUE has an overall B rating, which translates to Buy in our POWR Ratings system. It also has a B for Trade grade and Buy & Hold grade. In addition, it is currently ranked #55 in the Large Cap Value ETFs group. In addition to this, one can access VLUE's Peer grade here.
SPDR Series Trust SPDR Portfolio S&P 500 Value ETF (SPYV)
SPYV is linked to the S&P 500 Value Index, which offers exposure to large-cap companies that show value characteristics within the U.S. equity market. Investors with a longer-term horizon should contemplate the relevance of large-cap value stocks and the benefits they can add to any well-balanced portfolio, including dividends and rock-solid stability.
The fund has approximately $14.12 billion AUM. BRK.B is the top holding of SPYV, with a 3% weighting, followed by JNJ and PG, with 2.5% and 2.1% weightings, respectively.
SPYV has an expense ratio of 0.04% versus the category average of 0.49%. The fund has gained 5% over the past year and 3.5% over the past nine months.
Closing the last trading session at $41.02, the ETF is currently trading below its 52-week high of $42.86. SPYV's NAV stands at $40.96. The fund has a five-year monthly beta of 0.98, indicating less volatility than the broader market.
SPYV's POWR Ratings are consistent with its promising outlook. The ETF has an overall rating of A, which equates to Strong Buy in our proprietary rating system. It also has an A for Trade grade and Buy & Hold grade. In the Large Cap Value ETFs group, it is ranked #8. One can also access SPYV's Peer grade here.
VTV shares were trading at $144.43 per share on Tuesday morning, down $0.85 (-0.59%). Year-to-date, VTV has declined -1.30%, versus a -11.01% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.
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