The Best Value ETFs Of May 2024

Investors seeking the best low-fee value ETF, look no further. The SPDR Portfolio S&P 500 Value ETF screens the stocks included in the S&P 500 for value metrics, and then it ferrets out those that meet its criteria. SPYV holds roughly 400 companies. This S&P 500 value fund posts a hefty weighted average market cap of $355 billion for its holdings.

SPYV has the lowest expense ratio on the list and offers dependable access to the large-cap value universe. The top three holdings make up 8% of the fund’s portfolio: Berkshire Hathaway, Johnson & Johnson and Exxon Mobil. The rock-bottom expense ratio helped the fund lap its typical Morningstar category peer’s average annual total return by more than a full percentage point over the past decade. If you’re looking to tap large-cap value stocks, SPYV is a sound choice.

Thanks to recent market volatility, many former growth stocks  have become value plays. The Fidelity Value Factor ETF seeks out profitable companies featuring sound growth prospects, respectable balance sheets and value pricing. Both FVAL’s long-term earnings earnings growth rate and its projected growth rate are higher than the fund category’s average. That helps explain FVAL’s total return outperformance versus its peer group over the past one, three and five years.

Heavily weighted toward technology, healthcare and financial stocks, FVAL has benefited from strength in these sectors. Similar to many large-cap peers, the fund’s top ten holdings include well known names like Apple, Microsoft, Amazon, Alphabet and Johnson & Johnson.

The Invesco FTSE RAFI Developed Markets factor strategy ETF starts with a pool of 1,000 developed market stocks from the FTSE RAFI Developed ex U.S. 1000 Index, and then ranks them according to their fundamentals. The strategy attempts to beat the returns of the unmanaged index of developed market companies. The four ranking factors—book value, cash flow, sales and dividends—represent characteristics that can lead to strong long-term returns.

PXF is an international value fund that includes a smattering of blend and growth companies. It holds energy companies. Japanese firms comprise a big part of the portfolio. Companies from the UK, France and Canada also account for sizable allocations each. Investors who want international exposure, strong dividends and the opportunity for capital growth might appreciate this option.

The Vanguard International High Dividend Yield ETF is a passively managed index fund that aims for global companies based outside of the U.S. that deliver above-average dividend yields. It owns more than 1,300 companies located in both developed and emerging-markets with an average market cap of $67 billion. VYMI’s managers seek predominantly high-quality, low-volatility stocks.

VYMI, which opened in early 2016, has outperformed its Morningstar peer group’s average annual total return over the past five years. VYMI has also shown less volatility over the past three and five years.

VYMI allocates roughly 20% of its portfolio to emerging markets, 40% to Europe, 25% to the Pacific and 9% to North America. Investors looking for reasonable fees and companies with good dividends might consider this international value fund.

You might call this strategy ETF a “have your cake and eat it too” fund. Value investing tends to pay off handsomely over the long run, while momentum investing provides higher short-term returns. The combination of both strategies has the potential to offer better returns than a straight value approach.

The Invesco S&P MidCap Value with Momentum ETF begins by screening S&P MidCap 400 companies for stocks with the highest value and momentum scores. The result is a group of equities that represent the best of both value and momentum.

In contrast to its category peers, the fund is overweight financial services and basic materials, and less allocated to healthcare and industrials. Investors can expect some volatility with this holding, but also the opportunity to outperform the typical mid-cap value fund.

Cost-sensitive investors should check out the Vanguard Mid-Cap Value ETF. This passively managed index fund captures the returns of mid-cap value stocks. Populated with larger firms than XMVM, the average market cap of the roughly 195 companies within VOE is about $25 billion. VOE tracks the CRSP US Mid-Cap Value Index.

VOE’s largest industry sectors are financials, industrials, consumer discretionary stocks, utilities and real estate. The broad diversification of the fund ensures that no single holding will overly influence the fund’s returns. As performance and its dividend yield demonstrate, the mid-cap value asset class offers reasonable growth along with decent cash flow.

We haven’t found a more cost-effective, high-return, small-cap value option than this ETF. If you’re looking to capture this segment of the market, with a proven long-term record of outperforming other market segments, the Vanguard Small-Cap Value ETF is a solid pick. With more than 800 small cap value stocks, a price-earnings ratio slightly lower than its Morningstar category average and forecasted earnings per share growth over the next three to five years that tops its peer group’s projected average, VBR appears poised to continue delivering value and outperformance.

Growth stocks trounced value over the last decade, but the trend has shifted. In recent years VBR outperformed the Vanguard Small Cap Growth Fund (VBK). Like several of our other value picks, you’ll find high concentrations of financial and industrial stocks. VBR also likes consumer cyclical stocks.

Small cap value is a great addition to a diversified investment portfolio.