Exchange-traded funds (ETFs) have opened up a world of different strategies to individual investors. Passive investing in widely diversified indexes, thematic investing in various industries and technologies, and fundamental strategies such as growth and value. Unlike mutual funds, which have minimum investment amounts and cannot be traded on the open market, ETFs offer unparalleled convenience to the average person.
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Value investing is, you guessed it, an investment strategy that looks for stocks that are undervalued. This is a fairly wide umbrella. Some value investors look for small-cap stocks that the market is ignoring, while others look for distressed stocks that are trading at bargain prices. was popular among value investors). Sometimes the value is tangible, like when Apple's stock price slumped in 2013. Regardless of the details of their methodology, however, all value investors seek to buy stocks at a price lower than their intrinsic value.
If you're interested in value investing but don't have the time or inclination to research stocks yourself, value-oriented ETFs are a great way to get exposure to the strategy without putting in the effort yourself. Here are three of the best ETFs to invest in.
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1. SPDR Portfolio S&P 500 Value ETF (SPYV)
This value ETF is limited to stocks within the S&P 500. It's rare for a stock of this size to be significantly undervalued, but it does happen, and this his ETF tilts its holdings in that direction. SPYV is a great way to gain exposure to large-cap value stocks, with one of the lowest expense ratios at just 0.04%.
2. Vanguard Midcap Value ETF (VOE)
Vanguard is known for its low-fee, passively managed ETFs, and their value fund is no exception. VOE has an expense ratio of 0.07% and offers a solid dividend yield of over 2% as of April 2024. VOE is a good option for investors who want to add small businesses to their portfolio, as well as value investors who need a source. of income.
3. Vanguard Small Cap Value ETF (VBR)
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Another Vanguard ETF, VBR, holds over 800 small-cap stocks and also has a low expense ratio of 0.07%. Although small-cap stocks tend to be more volatile and riskier than large companies, they can provide above-average returns through capital gains. Additionally, VBR has a dividend yield of over 2%.
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This article originally appeared on GOBankingRates.com: 3 Best Value ETFs to Invest in
