End The Month Strong With These Top Value ETFs

Markets have surged thus far in November with the best election week performance since 1932, and a subsequent rally into value names and COVID-recovery stocks due to positive vaccine data from Pfizer PFE and BioNTech, Moderna, and Astrazeneca and Oxford University. Now with President Trump formally beginning the transition process to President-elect Joe Biden, any remaining semblance of election controversy has all but vanished. Although markets last week seemed to pause the rally and come to grips with the reality of surging COVID cases and economic shutdowns, sentiment right now is of relief and jubilation. One of the byproducts of this vaccine-induced “light at the end of the tunnel” has been a rotation out of growth/tech, and into cyclicals/value/COVID-recovery/small-caps. Although investors will have to consistently weigh the realities of the 2nd wave of COVID, with the vaccine optimism in the short-term, the long-term outlook is certainly positive.

For exposure to sectors set to benefit the most from a COVID-recovery, investors can invest in value ETFs. These ETFs focus on quality and value through investable indexes that have been undervalued and offer upside. Although growth has outperformed value over the last several years, there is a big rotation happening right now. Whether it will keep up remains to be seen, however value investing is a tried and true style of investing especially perfect for uncertain times- like now. Q.ai’s deep learning algorithms have identified several Top U.S. Value ETFs based on 90-day, 30-day, and 1-week fund flows. Our rating system usually includes Top Buys, Attractive, Neutral, Unattractive, and Top Shorts. This month, we have six Top Buys, two Attractive, and one Neutral.

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Top Buy

Vanguard Mega Cap Value ETF (MGV)

The Vanguard Mega Cap Value ETF MGV is our first Top Buy on our Top U.S. Value ETFs list for the second time in a row. This ETF aims to give investors diversified exposure to the largest value stocks in the U.S. such as Berkshire Hathaway BRK.B , Johnson & Johnson JNJ , Procter & Gamble PG , United Health, and JP Morgan. The ETF is on the smaller side with $3,318,217,788.27 AUM, and has seen consistently positive fund flows. It has a 90-day fund flow of $155,991,802.08, 30-day fund flow of $99,324,000.00, and 1-week fund flow of $20,861,000.00. Its net expense ratio of .07% is cheap and decent.

iShares Russell 2000 Value ETF (IWN)

The second on the list of Top Buy rated Top U.S. Value ETFs is the iShares Russell 2000 Value ETF IWN . The Russell 2000 has surged as of late, and this ETF tracks value stocks that trade on the index. In terms of AUM, the ETF is on the smaller side with $10,771,828,574.00 AUM. The ETF has seen consistently positive fund flows, with a fund flow of $1,030,536,070.00 over the last 90-days, a fund flow of $1,115,089,485.00 over the last 30-days, and a 1-week fund flow of $206,107,795.00. Its net expense ratio of .24% is pricier compared to other similar ETFs.        

Vanguard Small-Cap Value ETF (VBR)

The next Top Buy on our list is the Vanguard Small-Cap Value ETF VBR . This ETF tracks an index of diversified small-cap value stocks consisting of mainly Industrials, Financials, and Consumer Discretionary stocks. The ETF has $16,450,723,186.10 AUM and has seen positive fund flows over the last few months. The ETF has a 90-day fund flow of $611,928,548.83, 30-day fund flow of $368,001,297.49, and 1-week fund flow of $193,760,285.94. Its net expense ratio of .07% is also quite decent.

Vanguard Mid-Cap Value ETF (VOE)

The next Top Buy ETF on our list is the Vanguard Mid-Cap Value ETF VOE . This ETF tracks an index of mid-cap value stocks, with top holdings consisting of familiar names such as WEC Energy Group WEC , Eversource Energy, Willis Towers Watson, Motorola, and Clorox CLX . The ETF has $10,498,957,601.06 AUM and has seen positive fund flows over the last few months. The ETF has a 90-day fund flow of $148,740,540.59, 30-day fund flow of $136,477,900.80, and 1-week fund flow of $158,998,102.77. Its net expense ratio of .07% is also very reasonable.

Vanguard Russell 1000 Value (VONV)

The Vanguard Russell 1000 Value ETF VONV  is our next Top Buy on the list. This ETF tracks a similar index, of similar holdings consisting of high quality U.S. value stocks like many of the other ETFs on this list. With $3,146,685,000.00, this is one of the smallest ETFs on the list in terms of AUM. The ETF has seen consistent fund flows, with a 90-day fund flow of $252,189,750.00, 30-day fund flow of $96,841,250.00, and 1-week fund flow of $57,262,500.00. Its net expense ratio of .12% is also fairly reasonable.

Vanguard Value ETF (VTV)

The final Top Buy rated ETF is the Vanguard Value ETF VTV . This ETF aims to track an index of large-cap U.S. value stocks such as Berkshire Hathaway, Johnson & Johnson, Procter & Gamble, United Health, and JP Morgan. The ETF has $58,121,526,404.48 AUM, and has seen consistent fund flows. The ETF has a 90-day fund flow of $2,661,862,494.59, a 30-day fund flow of $1,275,855,258.86, and a 1-week fund flow of $374,478,447.48. Its net expense ratio of .04% is very reasonable.

Attractive

Alpha Architect U.S. Quantitative Value ETF (QVAL)

The Alpha Architect U.S. Quantitative Value ETF QVAL is our first Attractive ETF on our list. This ETF is a unique, fully automated ETF, that uses an algorithm to systematically select the cheapest high quality value stocks. The ETF’s automated stock selection process generally builds out a portfolio that holds between 40 and 50 stocks. In terms of AUM, this ETF is the largest on this list with $131,810,700.00 AUM. The ETF has also seen mixed fund flows, with a 90-day fund flow of $2,704,800.00, 30-day fund flow of -$800.00, and 1-week fund flow of 0. Its net expense ratio of .79% is by far the most expensive on this list, and is not attractive.  

iShares Edge MSCI USA Value Factor ETF (VLUE)

The iShares Edge MSCI USA Value Factor ETF VLUE is our second Attractive ETF. This ETF aims to track an index of U.S. large-cap and mid-cap value stocks. In terms of AUM, this ETF is on the smaller side with $8,451,550,907.80 AUM. The ETF has also seen mixed fund flows, with a 90-day fund flow of $1,589,252,390.00, 30-day fund flow of $494,771,405.00, and 1-week fund flow of $28,355,090.00. Its net expense ratio of .15% is also decent. 

Neutral

Schwab U.S. Large-Cap Value ETF (SCHV)

The lone Neutral ETF on our list is the Schwab U.S. Large-Cap Value ETF SCHV . The ETF aims to track the total return of the Dow Jones U.S. Large-Cap Value Total Stock Market Index, and is on the smaller side with $7,501,152,550.11 AUM. The ETF has seen positive fund flows, with a 90-day fund flow of $184,843,751.80, 30-day fund flow of $99,281,153.40, and 1-week fund flow of $54,553,843.55. Its net expense ratio of .04% is very cheap and attractive.

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