最新ニュース iShares S&P 500 Value ETF (ARCA:IVE)

iShares S&P 500 Value ETF

Technology

Healthcare

Financial Services

Industrials

Consumer Defensive

Consumer Cyclical

Energy

Communication Services

Utilities

Basic Materials

Real Estate

The Fund seeks to track the investment results of the S&P 500 Value Index (the Underlying Index), which measures the performance of the large-capitalization value sector of the U.S. equity market. It is a subset of the S&P 500 (the Parent Index) and consists of those stocks in the Parent Index exhibiting the strongest value characteristics, as determined by S&P Dow Jones Indices LLC (the Index Provider or SPDJI), a subsidiary of S&P Global, Inc. The value characteristics used by the Index Provider are book value to price ratio, earnings to price ratio and sales to price ratio. The Underlying Index represented approximately 45.4 percent of the market capitalization of the Parent Index as of March 31, 2024. As of March 31, 2024, stocks must have a market capitalization of at least dollar 15.8 billion for initial inclusion in the Parent Index; this threshold and constituents' market capitalization may fluctuate depending on the overall level of the equity markets.

Berkshire Hathaway, Inc.

Jpmorgan Chase & Co Common Stock Usd 1

Exxon Mobil Corp.

Johnson & Johnson

Unitedhealth Group Inc.

Walmart, Inc.

Chevron Corp.

Bank Of America Corp.

Procter & Gamble Company

Home Depot Inc/The

Apple Inc.

Microsoft Corporation

Amazon.com, Inc.

Coca Cola Co.

iShares Emergent Food and AgTech Multisector ETF

Amplify ETF Trust Amplify Global Cloud Technology

Inventiva SA

As Brent crude and <a href="https://www.benzinga.com/topic/energy">gasoline prices rise</a>, WisdomTree Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WT#NYSE">WT</a>) Head Of Equity Strategy Jeff Weniger is calling it: &#8220;A notable set-up for large-cap value relative to Growth&#8221; is taking shape.
What Happened: Since September, Brent crude has shot up by 12 points. And gasoline prices remained relatively flat year-over-year. Weniger now sees the rise in energy prices as a game-changer for the market. 
Investors should shift focus toward large-cap value stocks — particularly those with exposure to the energy sector, he says.
&#8220;If investors are of the view that crude oil will keep running, this could create a notable set-up for Large Cap Value relative to Growth,&#8221; Weniger told Benzinga in an exclusive interview.
For investors seeking exposure, there are four popular large-cap value equity ETFs in the U.S. to consider:
<ul>
<li>Vanguard Value ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VTV#NYSE">VTV</a>)</li>
<li>Capital Group Dividend Value ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CGDV#NYSE">CGDV</a>),</li>
<li>iShares Core High Dividend ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HDV#NYSE">HDV</a>)</li>
<li>WisdomTree U.S. High Dividend Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DHS#NYSE">DHS</a>) </li>
</ul>
Read Also: <a href="https://www.benzinga.com/economics/macro-economic-events/25/01/43017610/oil-prices-break-80-reach-6-month-highs-despite-israel-hamas-ceasefire-deal-why-is-crude-rallying">Oil Prices Break $80, Reach 6-Month Highs Despite Israel-Hamas Ceasefire Deal: Why Is Crude Rallying?</a>
<h2 class="wp-block-heading">Energy Prices, Sectors, Impact On Growth</h2>
The S&amp;P 500 Value Index (SVX), with 6% of its weight in the energy sector, is in a prime position to benefit from rising oil prices. In contrast, the S&amp;P 500 Growth index, with just 1% exposure to energy, could face headwinds.
&#8220;If the consumer does take a hit from some forthcoming rise in gasoline prices, that could be another headwind for the S&amp;P 500 Growth index,&#8221; Weniger adds.
The Vanguard S&amp;P 500 Growth ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VOOG#NYSE">VOOG</a>) tracks the performance of companies in the S&amp;P 500 Growth Index, just as the iShares S&amp;P 500 Value ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVE#NYSE">IVE</a>) tracks the performance of companies in the S&amp;P 500 Value Index.
With the consumer spending more at the pump, the S&amp;P 500 Growth index—heavily weighted (16%) in Consumer Discretionary—could feel the pinch, while the Value index, with just 5% in the same sector, remains less exposed. 
The game plan? Look to Large Cap Value stocks with energy exposure as an effective hedge against rising gas prices.
<h2 class="wp-block-heading">Investors Should Take Note</h2>
For those expecting oil to continue its upward trajectory, Weniger's advice is clear: &#8220;Large Cap Value relative to Growth&#8221; could be the play to make in the coming months. 
As gasoline prices climb, those invested in energy-heavy Value stocks may find themselves ahead of the curve.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/25/01/43013634/opecs-optimism-clashes-with-ieas-conservative-2025-oil-growth-projections">OPEC&#8217;s Optimism Clashes With IEA&#8217;s Conservative 2025 Oil Growth Projections</a></li>
</ul>
Image: Shutterstock

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Broad U.S. Equity ETFs

Economics

Exclusives

Trading Ideas

Interview

ETFs

Capital Group Dividend Value ETF Capital Group Dividend Value ETF

CGDV

VOOG

EXCLUSIVE: WisdomTree Exec Predicts Energy Prices Will Create 'Notable Set-Up For Large Cap Value Relative To Growth'

Walt Disney Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIS#NYSE">DIS</a>) plans another round of job cuts in its TV division, targeting a shrinking segment of its business.
The company will eliminate about 140 positions, representing roughly 2% of staff at Disney Entertainment Television, Bloomberg <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-07-31/disney-plans-a-new-round-of-job-cuts-in-its-television-operation?sref=TBDibEcD" rel="noreferrer noopener">reports</a>.
These cuts will significantly affect networks like NatGeo and Freeform, reducing their programming. ABC stations will also see job reductions as part of this cost-saving effort.
Disney is striving to balance the need for streaming investments against the rapid decline of its profitable cable networks.
NatGeo will see about 13% of its staff cut, focusing its remaining efforts on a few shows like Genius: MLK/X.
Freeform, targeting a teen audience with shows like Grown-ish, has seen its viewership shift to streaming, prompting further cuts. Disney is also cutting jobs in its marketing and publicity teams, Bloomberg writes.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/01050348/newplot-1.png" alt="" class="wp-image-469805" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/01050348/newplot-1.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/01050348/newplot-1-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
The company&#8217;s entertainment TV networks contributed about 12% of total revenue in the last reported quarter, excluding sports operations like ESPN.
Disney got a boost <a target="_blank" href="https://www.benzinga.com/news/24/07/39991247/disney-amc-and-imax-stocks-surge-after-deadpool-wolverine-breaks-box-office-records" rel="noreferrer noopener">from the collections of</a> Ryan Reynolds and Hugh Jackman starrer &#8220;Deadpool &amp; Wolverine,&#8221; reaching a record for an R-rated film. The movie earned $205 million in ticket sales in the U.S. and Canada this weekend, marking the year&#8217;s largest domestic debut, Bloomberg <a target="_blank" href="https://www.bloomberg.com/news/videos/2024-07-29/-deadpool-at-205-million-is-biggest-opening-of-year?srnd=phx-economics-v2&amp;sref=TBDibEcD" rel="noreferrer noopener">reports</a>.
According to Statista, Amazon.Com Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>) Prime Video and Netflix Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NFLX#NASDAQ">NFLX</a>) dominated the U.S. subscription video-on-demand (SVOD) market in the <a target="_blank" href="https://www.benzinga.com/news/24/07/40042764/amazon-challenges-netflix-with-cheaper-ad-slots-boosts-prime-video-ads-report" rel="noreferrer noopener">second quarter of 2024</a>, each securing a 22% share.
Investors can gain exposure to Disney through iShares Russell 1000 Value ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWD#NYSE">IWD</a>) and iShares S&amp;P 500 Value ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVE#NYSE">IVE</a>).
Price Actions: DIS shares traded higher by 0.11% at $93.79 premarket at the last check on Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock

News

Tech

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AMZN

NFLX

Disney Plans More Layoffs in TV Unit, Focuses on Streaming Investments: Report

Exchange traded funds dedicated to a single investment factor can take on sector bets that are often significantly larger than broad market funds.
Sector concentration is particularly prevalent in growth and value ETFs. The sectors that often dominate those funds are technology (growth) and financial services (value).
<h3>What To Know</h3>
Growth stocks have been trouncing their value rivals for over a decade due in large part to the global financial crisis taking a heavy toll on the financial services sector. While no sector was immune to the crisis, its aftermath was punitive for the financial services sector.
From 2014 through 2017, the S&amp;P 500 Technology Index outperformed the equivalent financial services index in three of four years and appears poised to do the same again this year.
&ldquo;Although the trend remains intact so far in 2018, a recent uptick in volatility left many investors wondering if value might be in line for a comeback,&rdquo; S&amp;P Dow Jones Indices said&nbsp;<a href="http://www.indexologyblog.com/2018/12/17/value-versus-growth-a-sector-perspective/">in a recent note</a>. &ldquo;Indeed, value outperformed in October and November as many growth-oriented stocks came under pressure from investors looking to take risk off the table. While it remains to be seen if this nascent trend is here to stay, historical sector exposures may be useful for assessing the relative prospects of growth and value.&rdquo;
<h3>Why It&#39;s Important</h3>
The iShares S&amp;P 500 Growth ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ivw#NYSE">IVW</a>), which tracks the S&amp;P 500 Growth Index, devotes 31.52 percent of its weight to tech stocks. By comparison, the fund&#39;s second-largest sector weight, health care, represents just 18.12 percent of the fund&#39;s weight. Three of IVW&#39;s top 10 holdings are technology stocks. IVW has $20.41 billion in assets under management.
The $14.71 billion iShares S&amp;P 500 Value ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ive#NYSE">IVE</a>), which tracks the S&amp;P 500 Value Index, has a financial services weight of 22.31 percent. That&#39;s more than 1,000 basis points above its second-largest sector allocation, which is also health care.
Year-to-date, IVE is down almost 6 percent while IVW, the growth ETF, is up almost 3.6 percent.
<h3>What&#39;s Next</h3>
For over two decades, financials have loomed large in the value index while technology has dominated growth benchmarks. That sector&nbsp;exposure had significant impacts on returns attributable to growth and value stocks.
&ldquo;This result held across all three time frames, capturing 1) the run-up to the height of the Tech bubble (Jan. 1995 to Mar. 2000); 2) the subsequent bursting of that bubble and the run-up to the Global Financial Crisis (Apr. 2000 to Dec. 2007); and 3) the Global Financial Crisis and the most recent bull market in U.S. equities (Jan. 2008 to Nov. 2018),&rdquo; according to S&amp;P Dow Jones.
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These Sectors Dominate Growth, Value ETFs

In late September, the communication services sector <a href="http://www.benzinga.com/analyst-ratings/analyst-color/18/09/12339312/the-communication-services-sector-is-almost-here">officially became the 11th sector in the S&amp;P 500</a>. The move saw an increased weight in the S&amp;P 500 for the group previously known as telecom, as well as some departures from the consumer discretionary and technology sectors to communication services.
Those moves affect more than just sector exchange traded funds. Some growth and value ETFs are affected by moves used to create the communication services sector.
<h3>What Happened</h3>
Alphabet Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/goog#NASDAQ">GOOG</a>), Facebook Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/fb#NASDAQ">FB</a>) and Netflix, Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/nflx#NASDAQ">NFLX</a>) are among the stocks that left technology and consumer discretionary for communication services, explaining much of the new found communication services heft <a href="https://www.benzinga.com/trading-ideas/long-ideas/18/10/12436587/a-schwab-growth-etf-for-october">in some growth ETFs</a>, including the Schwab U.S. Large-Cap Growth ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/schg#NYSE">SCHG</a>).
SCHG &ldquo;has 24% of assets in Information Technology, 16% in Consumer Discretionary and 12% in Communications Services; an additional 16% in health care is not impacted by the GICS realignment,&rdquo; said <a href="https://newpublic.cfraresearch.com/">CFRA Research</a> Director of ETF &amp; Mutual Fund Research Todd Rosenbluth in a recent note.
SCHG holds 417 stocks and features Alphabet and Google among its top 10 holdings. The rival SPDR Portfolio S&amp;P 500 Growth ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/spyg#NYSE">SPYG</a>) allocates 12.16 percent of its weight to communication services, that ETF&#39;s fourth-largest sector weight.
<h3>Why It&#39;s Important</h3>
Some value ETFs also have new weights to communication services, but to different names from that sector than the likes of Alphabet and Netflix. The iShares S&amp;P 500 Value ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ive#NYSE">IVE</a>) has a new communication services weight.
IVE &ldquo;held more in Communications Services (7%) of assets than in Consumer Discretionary (6%),&rdquo; said Rosenbluth. He notes IVE&#39;s communication services exposure is primarily comprised of AT&amp;T Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/t#NYSE">T</a>), Verizon Communications Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vz#NYSE">VZ</a>), Walt Disney Co. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dis#NYSE">DIS</a>) and Comcast Corp. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/cmcsa#NASDAQ">CMCSA</a>).
<h3>What&#39;s Next</h3>
The Vanguard Value ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vtv#NYSE">VTV</a>), a direct competitor to IVE, has a lower communication services weight than its iShares rival but a larger technology allocation.
&ldquo;While the sector weightings of these style-oriented ETFs will shift as the growth/momentum or value criteria is revisited per index rules, there are no sector constraints in building these portfolios. As such, we think investors need to look inside and understand how much exposure they have to the three impacted sectors,&rdquo; said Rosenbluth.
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<a href="https://www.benzinga.com/trading-ideas/long-ideas/18/10/12447486/it-might-finally-be-time-for-emerging-markets-etfs">Are Emerging Markets Ready For Action?</a>

CMCSA

GOOG

SCHG

SPYG

How Growth And Value ETFs Look After The Debut Of Communication Services

At least two important factors should be noted with&nbsp;exchange traded funds dedicated to value funds. First, the value factor has been trailing growth for a significant portion of the current bull market. Second, many traditional value ETFs are dominated by a small amount of sectors.
Sector-level concentration risk should also be considered, but with energy often looming large in value ETFs, value funds could be bolstered if the once-downtrodden sector&#39;s recent bullish trends continue.&nbsp;
<h3>
	What Happened</h3>
The energy sector was a dud for essentially all of 2017 and much of the first quarter of 2018, but the group started snapping out of its funk in a big way in April.
April &ldquo;was the S&amp;P 500 Energy&rsquo;s 17th-best month on record since October 1989, and it gained most since September 2017,&rdquo; according to <a href="http://www.indexologyblog.com/2018/05/02/energy-powers-small-cap-and-value-in-april/">S&amp;P Dow Jones Indices</a>.
Year-to-date, the S&amp;P 500 Value Index is trailing the S&amp;P 500 and the S&amp;P 500 Growth Index, but last month, the value benchmark was even with its growth rival and the broader S&amp;P 500.
<h3>
	Why It&#39;s Important</h3>
Some well-known value ETFs are heavily allocated to energy stocks. For example, the $15.5-billion iShares S&amp;P 500 Value ETF (NYSE: <a class="ticker" href="/stock/ive#NYSE">IVE</a>) allocates nearly 13 percent of its weight to energy stocks, its second-largest sector weight behind financial services. IVE follows the S&amp;P 500 Value Index.
The PowerShares S&amp;P 500 Pure Value Portfolio (NYSE: <a class="ticker" href="/stock/rpv#NYSE">RPV</a>) devotes 12.24 percent of its roster to energy stocks, also that ETF&#39;s second-largest sector exposure behind financials. RPV surged 5 percent last month. In the cases of IVE and RPV, the ETF&#39;s energy exposure is more than or close double that of the S&amp;P 500. Conversely, the S&amp;P 500 Growth Index has an energy weight of just 0.3 percent.
<h3>
	What&#39;s Next</h3>
&ldquo;Energy&rsquo;s outperformance not only propelled small caps to outperform large caps (<a href="http://www.indexologyblog.com/2018/04/12/drilling-into-industries-finds-what-lifts-energy-stocks-with-oil/">since smaller energy companies rise more with oil</a>) but drove value to outperform growth,&rdquo; said S&amp;P Dow Jones. &ldquo;The <a href="https://us.spindices.com/indices/equity/sp-500-value">S&amp;P 500 Value</a> has 12.5 percent more energy than the <a href="https://us.spindices.com/indices/equity/sp-500-growth">S&amp;P 500 Growth</a>, which has nearly none.&rdquo;
Due in part to energy&#39;s resurgence, value stocks across all market values &mdash; large, mid and small &mdash; outperformed growth in April.
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Commodities

Markets

Why The Energy Sector Could Spark A Resurgence In Value ETFs

Investors looking to circle their wagons around the still-lagging value factor in hopes value stocks will rebound later this year have plenty of exchange traded funds to consider. That group includes the SPDR Portfolio S&amp;P 500 Value ETF (NYSE: <a class="ticker" href="/stock/spyv#NYSE">SPYV</a>).
The $1.33-billion SPYV is <a href="https://newpublic.cfraresearch.com/">CFRA Research&#39;s</a> focus ETF for the month of April. With an annual expense ratio of 0.04 percent, the equivalent of $4 on a $10,000 investment, SPYV is one of the least expensive value ETFs on the market. In fact, SPYV is the cheapest ETF tracking the S&amp;P 500 Value Index. The SPDR fund is significantly less expensive than the Vanguard S&amp;P 500 Value ETF (NASDAQ: <a class="ticker" href="/stock/voov#NASDAQ">VOOV</a>) and the iShares S&amp;P 500 Value ETF (NYSE: <a class="ticker" href="/stock/ive#NYSE">IVE</a>).
&ldquo;SPYV is one of the three ETFs tracking this index, but at just 4 basis points, the SPDR ETF is at 11 basis points cheaper than VOOV and 14 basis points less than IVE,&rdquo; CFRA Director of ETF &amp; Mutual Fund Research Todd Rosenbluth in a note out last week.
<h3>
	Spying On SPYV</h3>
SPYV holds 389 stocks with a weighted average market value of $125.23 billion. The ETF&#39;s underlying index &ldquo;contains stocks that exhibit the strongest value characteristics based on: book value to price ratio; earnings to price ratio; and sales to price ratio,&rdquo; <a href="https://us.spdrs.com/en/etf/spdr-portfolio-sp-500-value-etf-SPYV">according to State Street.</a>
As is the case with many traditional value funds, SPYV is heavily allocated to the financial services and energy sectors. Those sectors combine for 36.72 percent of the fund&#39;s weight. Seven of the ETF&#39;s top 10 holdings, including Berkshire Hathaway Inc. (NYSE: <a class="ticker" href="/stock/brk-b#NYSE">BRK-B</a>) and JPMorgan Chase &amp; Co.(NYSE: <a class="ticker" href="/stock/jpm#NYSE">JPM</a>), hail from those sectors.
With passively managed ETFs, we think investors focus too much on how well a fund tracks a benchmark and the fund&rsquo;s past performance record,&rdquo; said Rosenbluth. &ldquo;Meanwhile, we think SPYV&rsquo;s performance record relative to active funds is the result of investment decisions made by those active funds, not the ETF manager SSGA. CFRA thinks what&rsquo;s going to drive SPYV in 2018 and beyond are its holdings.&rdquo;
The research firm has a Buy rating on Dow component JPMorgan Chase.
<h3>
	Fees Matter</h3>
Fees matter when it comes to investors&#39; long-term returns. Those fees also matter when it comes to luring investors in the first place. SPYV is proof positive of that notion.
Since its expense ratio reduction in mid-October and the addition of SPYV onto a commission free platform, SPYV has pulled in more than $1 billion of new money. Meanwhile, its average daily trading volume has doubled to approximately 700,000 shares,&rdquo; Rosenbluth said.&nbsp;
CFRA has an Overweight rating on SPYV.
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Analyst Color

Analyst Ratings

BRK-B

SPYV

VOOV

A Cheap Value ETF For April

After trailing growth and momentum fare last year, value stocks continue to confound investors in 2018. For example, the iShares Russell 1000 Value ETF (NYSE: <a class="ticker" href="/stock/iwd#NYSE">IWD</a>), one of the largest exchange traded funds dedicated to value stocks, is off nearly 1 percent year-to-date.
&quot;To start 2018, U.S. value strategies have lagged growth alternatives and broader benchmarks, as value funds tend to hold less exposure to technology stocks that have climbed higher,&rdquo; <a href="https://newpublic.cfraresearch.com/">CFRA Research</a> Director of ETF &amp; Mutual Fund Research Todd Rosenbluth said in a Tuesday note.
&ldquo;However, there are exposure differences in popular value ETFs and mutual funds that help explain the performance distinctions seen in 2018 and in years past. Increasingly, investors are looking at funds using metrics that have historically demonstrated excess market returns over the long term, known as factors. These include positive momentum, smaller size, low value and dividend yield.&rdquo;
The $37-billion IWD follows the Russell 1000 Value Index. IWD holds 710 stocks, about 27.6 percent of which hail from the financial services sector. Four of IWD&#39;s top 10 holdings are financial services stocks.
<h3>
	A Struggling Stablemate</h3>
IWD is not alone in the arena of struggling value ETFs. The iShares S&amp;P 500 Value ETF (NYSE: <a class="ticker" href="/stock/ive#NYSE">IVE</a>) is down about 2 percent this year. The $14.8-billion IVE follows the S&amp;P 500 value index and holds 389 stocks.
Like IWD, IVE is heavily allocated to the financial services sector. IVE allocates nearly 25.4 percent of its weight to that sector. Both IWD and IVE feature double-digit weights to the energy sector, one of the worst-performing groups in the S&amp;P 500 this year. With energy stocks struggling, some value strategies are likely to follow suit.&nbsp;
IVE and IWD have an average standard deviation of 10.40 percent, only modestly higher than the 10.16 percent found in the S&amp;P 500.
<h3>
	Another Sector Concern</h3>
Some value ETFs, including IVE and to a lesser degree IWD, have an issue with consumer staples exposure. The S&amp;P 500 Consumer Staples Index is down about 7.6 percent year-to-date, a loss that could grow if rising interest rates finally serve to boost the dollar.
Consumer staples are IVE&#39;s third-largest sector weight at 10.6 percent, while IWD has an almost 8-percent weight to that struggling sector.
CFRA is bullish on IWD and IVE, applying Overweight ratings to both value ETFs.
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<a href="https://www.benzinga.com/analyst-ratings/analyst-color/18/03/11385402/why-a-netflix-departure-from-this-consumer-etf-could-dr">Concerns About This Consumer ETF</a>

Waiting On Value ETFs To Bounce Back In 2018

With just a few weeks left in 2017, the following sounds like a broken record: Value stocks and exchange-traded funds are laggards. The S&amp;P 500 Value Index is trailing the S&amp;P 500 by more than 600 basis points on a year-to-date basis as growth and momentum stocks drive the broader market higher.
Successful implementation of President Donald Trump&#39;s tax reform efforts could be a positive catalyst for value ETFs, such as the iShares S&amp;P 500 Value ETF (NYSE: <a class="ticker" href="/stock/ive#NYSE">IVE</a>) and the iShares Russell 1000 Value ETF (NYSE: <a class="ticker" href="/stock/iwd#NYSE">IWD</a>). The thesis is significant as many of the largest smart beta ETFs are value funds. Combined, IVE and IWD have about $55 billion in assets under management. The good news is value stocks really are offering, well, value.
&ldquo;Many would argue that the discount is justified given a wide gap in earnings growth and profitability,&rdquo; <a href="https://www.blackrockblog.com/2017/12/06/tax-cuts-reawaken-value/?utm_source=blog&amp;utm_medium=hero&amp;utm_campaign=hero">said BlackRock</a> in a recent note. &ldquo;Value stocks are, by definition, values for a reason, i.e. they tend to be less profitable. However, even after adjusting for current differentials in profitability, value looks cheap.&rdquo;
<h3>
	Value Vindication</h3>
Spotting why value ETFs are attractively valued and potential beneficiaries of tax reform. A lot of that thesis revolves around the financial services sector, which is one of just a few sectors in a the U.S. seen as a credible value destination.
Financials are surging due in large part to the expectations of tax reform and the Trump administration&#39;s efforts to relax some of the regulatory burdens faced by the industry since the global financial crisis.
Financial services stocks account for over 28 percent of IVE&#39;s weight, more than double the ETF&#39;s second-largest sector allocation. The $40 billion IWD devotes almost 27 percent of its weight to financials, also more than double its second-largest sector exposure.
&ldquo;Tax cuts might provide the missing ingredient,&rdquo; said BlackRock. &ldquo;The reason: Typically investors place a smaller discount on value when growth is faster, particularly nominal growth. In other words, a bit of inflation would help close the valuation gap between value and growth.&rdquo;
<h3>
	An Inflation Assist</h3>
Investors waiting on ETFs such as IVE and IWD to become leaders should be rooting for higher inflation. Historical data confirm as much.
&ldquo;Looking back at the past 20 plus years, value has traded higher relative to growth when inflation, measured by the consumer price index (CPI), is higher,&rdquo; according to BlackRock. &ldquo;Higher inflation would arguably be even more supportive if it were driven by higher oil prices, as energy companies appear particularly cheap today.&rdquo;
IVE and IWD have an average weight to the energy sector of about 10.7 percent.
Related Links:
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/17/12/10876508/analyst-financial-services-is-the-hot-sector-in-etfs">Financial ETFs Are Hot</a>
<a href="http:// https://www.benzinga.com/trading-ideas/long-ideas/17/12/10876504/tap-tech-in-israel-with-this-new-etf">A New Way To Play Israeli Tech Stocks</a>
Photo credit: Emily Elconin

Politics

General

A Trump Catalyst For Value ETFs

When the value factor and the related exchange-traded funds rebounded last year, investors were reminded that value stocks had been on a surprisingly long streak of lagging growth equivalents. Actually, the value factor has lagged the broader market over the past several years.
<h3>Value ETFs' Appeal</h3>
For example, the iShares S&amp;P 500 Value ETF (NYSE: <a class="ticker" href="/stock/ive#NYSE">IVE</a>) and the iShares Russell 1000 Value ETF (NYSE: <a class="ticker" href="/stock/iwd#NYSE">IWD</a>) are each up about 30 percent over the past three years, but the S&amp;P 500 is higher by more than 36 percent over that period.
Still, investors looking to access the value factor via funds rather than single stocks should note that <a href="https://www.benzinga.com/analyst-ratings/analyst-color/17/01/8861480/a-value-etf-looks-for-big-things-in-2017">actively managed value funds </a>are struggling to beat their benchmarks.
&ldquo;In 2016, the majority of actively managed large-cap value mutual funds underperformed the S&amp;P 500 Value index, continuing a now seven-year run of failing to keep up with index alternatives,&rdquo; said <a href="http://cfraresearch.com/">CFRA Research</a> in a note out Wednesday. &ldquo;In the last 15 years, the majority of large-cap growth funds outperformed the S&amp;P 500 Growth index eight times, a more than respectable record. However, such success for value funds occurred in just five years and it has not occurred since 2009.&rdquo;
<h3>The Role Of Fees For Outcomes</h3>
Not surprisingly, higher fees for actively managed fees are a drag on investors&#39; outcomes. IVE and IWD charge just 0.18 percent and 0.2 percent per year, respectively. The Vanguard Value ETF (NYSE: <a class="ticker" href="/stock/vtv#NYSE">VTV</a>) charges just 0.08 per year, or $8 on a $10,000 investment. That makes VTV cheaper than <a href="https://personal.vanguard.com/us/funds/snapshot?FundId=0966&amp;FundIntExt=INT">93 percent of rival funds</a>.
&ldquo;It is easy to point to the 1.1 percent Lipper peer average net expense ratio as the culprit for the underperformance relative to a free index. Yet, in 2016, the average active fund in the SPIVA study rose 14.21 percent and lagged the index by 319 basis points. Meanwhile, the largest ETF tracking the S&amp;P 500 index iShares S&amp;P 500 Value (IVE) has a 0.18 percent expense ratio and gained 17.31 percent,&rdquo; said CFRA.
The $13.6 billion IVE holds 352 stocks. As is the case with many value ETFs, IVE has a large allocation to the financial services sector at 26.1 percent. Large energy exposure is another hallmark of value ETFs and IVE allocates 11.5 percent to that sector.
CFRA has an Overweight rating on IVE.
Related Links:
<a href="https://www.benzinga.com/trading-ideas/long-ideas/17/04/9295476/2-new-active-etfs-with-unique-spins-on-risk-management">2 New Active ETFs With Unique Spins On Risk Management</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/17/04/9284804/where-to-find-value-with-small-caps">Where To Find Value With Small Caps</a>

Finding Value With Value ETFs

The value factor was vindicated last year after lagging its growth counterpart for a substantial part of the current bull market.
Just look at the iShares S&amp;P 500 Value Index (ETF) (NYSE: <a class="ticker" href="/stock/ive#NYSE">IVE</a>) and the Vanguard Value ETF (NYSE: <a class="ticker" href="/stock/vtv#NYSE">VTV</a>). IVE and VTV, two of the largest exchange-traded funds dedicated to value stocks, both returned more than 17 percent last year while the S&amp;P 500 gained &ldquo;just&rdquo; 12 percent. So, it can be said that ETFs like IVE head into 2017 with some momentum, and the iShares ETF garnered some acclaim as CFRA Research&#39;s focus ETF for the month of January.
<h3>The Value Strategy</h3>
&ldquo;The S&amp;P 500 Value index, the benchmark that IVE seeks to track, has outperformed its Growth sibling in 2016. Yet value lagged growth the three prior calendar years as what should serve as reminder of using past performance solely when making fund selections. Value&#39;s success in 2016 has been in part due to the sectors it has the most and least exposure to,&rdquo; said <a href="https://www.cfraresearch.com/">CFRA Research</a> in a note out earlier this week.
As has been previously noted, sector hallmarks of traditional value ETFs like IVE include large weights to the<a href="https://www.benzinga.com/trading-ideas/long-ideas/16/05/7976815/voracious-for-value-etfs"> energy and financial services</a> sectors, two of last year&#39;s best-performing groups. IVE obliges with a combined weight of just over 39 percent to financial services and energy, in that order.
For investors looking to use value ETFs as gauges regarding what sectors are richly valued, it can be considered noteworthy that three of IVE&#39;s four smallest sector weights are interest rate-sensitive sectors: utilities, telecom and real estate. Those groups combine for nearly 12 percent of IVE&#39;s weight.
Although defensive consumer staples stocks are generally considered pricey, that is IVE&#39;s third-largest sector weight at 11.6 percent.
<h3>Volume And Ratings</h3>
&ldquo;Volume for IVE has picked up in recent months, with 1.09 million shares trading on average in the past month, up from 860,000 over the six month period. The ETF is above its 200-day moving average, creating a bullish technical indicator. Meanwhile, the bid/ask spread is just a penny,&rdquo; said CFRA.
The research firm has Buy or Strong Buy ratings on six of IVE&#39;s top 10 holdings, a group that combines for just under 27 percent of the ETF&#39;s weight. Four of IVE&#39;s top 10 holdings are members of the Dow Jones Industrial Average.
CFRA Research has an Overweight rating on IVE, the research firm&#39;s highest fund rating. IVE had 352 holding as of the end of the fourth quarter.

Reiteration

A Value ETF Looks For Big Things In 2017

Monday&#39;s news that Warren Buffett&#39;s Berkshire Hathaway Inc. (NYSE: <a class="ticker" href="/stock/brk-a#NYSE">BRK-A</a>) (NYSE: <a class="ticker" href="/stock/brk-b#NYSE">BRK-B</a>) is <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/05/7990073/warren-buffetts-3-biggest-portfolio-changes">now a shareholder</a> of Apple Inc. (NASDAQ: <a class="ticker" href="/stock/aapl#NASDAQ">AAPL</a>) is stoking chatter that the iPad maker is now a legitimate value. After all, Buffett is widely regarded as the greatest value investor of all time.
<h3>Apple, A Value Stock?</h3>
However, being tagged with the value label is often seen as a scarlet letter for technology companies. While Apple will not be confused with Hester Prynne, avoidance of the value label explains why for so long so many tech companies refused to pay dividends. Of course, that has changed and Apple is <a href="http://investorplace.com/2016/04/apple-dividend-aapl/#.Vzu5LuSqz3A">a big reason why</a>.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/media/cnbc/16/05/7996935/apple-suppliers-reportedly-ramp-up-hiring-for-iphone-7">Apple Suppliers Reportedly Ramp Up Hiring For iPhone 7</a></bzrelatedlink>
Investors anxious to dub Apple as a value stock might also be wondering if the iPhone maker will soon be appearing in exchange-traded funds dedicated to the value factor. Approximately 100 ETFs currently feature some exposure to Apple, but many of those are far from dedicated value funds. S&amp;P Dow Jones Indices, the largest provider of indices for use by ETF providers, classifies Apple as a growth stock.
The index provider reviews stocks labeled as growth and value in December, so even if Apple is going to be appearing in some ETFs in which it currently does not reside, it will be a while before that happens.
<h3>Growth Vs. Value</h3>
&ldquo;The stocks in the S&amp;P 500 are ranked by the ratio of their growth score to their value score. The first third of the rankings &mdash; highest ratio of growth to value &mdash; are growth stocks, the last third &mdash; lowest ratio of growth to value &mdash; are value stocks and the middle third are apportioned between growth and value based on their scores,&rdquo; S&amp;P Dow Jones Indices Index Committee Chairman David Blitzer in a <a href="http://www.indexologyblog.com/2016/05/17/growth-value-and-apple/">note out Tuesday</a>.
So Apple currently is not a member of the iShares S&amp;P 500 Value Index (ETF) (NYSE: <a class="ticker" href="/stock/ive#NYSE">IVE</a>), which as its name implies, follows an S&amp;P index. Other index providers apparently view Apple as a growth stock, too.
For example, the iShares Russell 1000 Value Index (ETF) (NYSE: <a class="ticker" href="/stock/iwd#NYSE">IWD</a>), which tracks the Russell 1000 Value Index, does not hold Apple. The Vanguard Value ETF (NYSE: <a class="ticker" href="/stock/vtv#NYSE">VTV</a>), which follows the CRSP US Large Cap Value Index, does not own Apple, either. The Vanguard Growth ETF (NYSE: <a class="ticker" href="/stock/vug#NYSE">VUG</a>) features Apple as its largest holding.
What stands to confound investors about Apple&#39;s growth or value status are inconsistencies among index providers and their own respective views of value. For example, the SPDR S&amp;P 1500 Value Tilt ETF (SPDR Series Trust (NYSE: <a class="ticker" href="/stock/vlu#NYSE">VLU</a>)) owns shares of Apple, but the aforementioned IVE, following an index from the same provider, does not.
Investors also should not assume that quality and low volatility imply value because <a href="https://www.ishares.com/us/products/256101/QUAL?referrer=tickerSearch">some ETFs</a> following the quality and low volatility factors feature Apple, while value ETFs from the same provider do not.

AAPL

BRK-A

Is Apple Headed To Your Value ETF?

One of the more noticeable themes among investment factors this year is the resurgence of the widely followed value factor. During the halcyon days of the current bull market, value was not the place to be as investors favored growth and momentum fare.
That script has been flipped in 2016. Flows data for exchange-traded funds based on the value factor confirm as much. Investors should consider boosting exposure to the value factor now before it gets too hot and they chase value when it is no longer offering, well, value.
&ldquo;Investors have picked up on the recent trend and have actively been shifting assets between the two fundamental strategies since the start of the year. Growth ETFs have now seen $5.9 billion of outflows ytd as investors have withdrawn funds out of the strategy for every month so far this year,&rdquo; said Markit <a href="http://www.markit.com/Commentary/Get/12052016-Equities-The-great-value-investing-rotation">in a recent note</a>.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/05/7934112/value-is-working-here-too">Value Is Working Here, Too</a></bzrelatedlink>
<h3>Two Classics</h3>
Conversely, the iShares S&amp;P 500 Value Index (ETF) (NYSE: <a class="ticker" href="/stock/ive#NYSE">IVE</a>) and the Vanguard Value ETF (NYSE: <a class="ticker" href="/stock/vtv#NYSE">VTV</a>) have added about $2 billion, combined, in new assets this year. IVE is up 3.7 percent year-to-date, better than double the returns offered by the S&amp;P 500, while VTV is outpacing the benchmark U.S. equity index by 110 basis points.
<h3>A Third Name</h3>
Another value ETF that must be considered is the Guggenheim Invest S&amp;P 500 Pure Value ETF (NYSE: <a class="ticker" href="/stock/rpv#NYSE">RPV</a>). Part of the reason RPV has been in the spotlight this year is the<a href="http://www.benzinga.com/trading-ideas/long-ideas/16/03/7658916/the-best-etf-since-the-start-of-the-bull-market-is"> seven-year anniversary</a> of the current bull market. Over that time, RPV has notched a legendary performance, turning $10,000 invested on March 10, 2009, into more than $62,000 as of March 10, 2016.
RPV is beating VTV and handily outpacing the S&amp;P 500 this year. The rub with many value ETFs, including this trio, is substantial allocations to either financial services and energy stocks or both. Most value ETFs feature those groups as their top two sector weights. In the case of RPV, the Guggenheim value offering, financials are that ETF&#39;s largest sector weight at 26.9 percent.
Utilities and consumer discretionary names combine for over 29 percent of RPV&#39;s weight before getting to <a href="http://guggenheiminvestments.com/products/etf/details?productId=94">the 9.6 percent</a> the ETF devotes to energy stocks.
&ldquo;Value ETFs have seen the opposite trend as the asset class recovered from the outflows seen in January with four straight months of consecutive inflows. Net, net, investors have added $2 billion of exposure to value investing,&rdquo; added Markit.

Voracious For Value ETFs

The resurgence of the value factor this year has gotten plenty of attention, prompting scores of advisors and investors to revisit previously beloved exchange-traded funds dedicated to the value factor.
So far, the move back to value ETFs is rewarding investors. For example, the popular iShares S&amp;P 500 Value Index (ETF) (NYSE: <a class="ticker" href="/stock/ive#NYSE">IVE</a>) is up 1.2 percent year-to-date, while the S&amp;P 500 is higher by just 0.8 percent. <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/10/5895480/value-etfs-may-get-their-day-in-the-sun">Benzinga</a> forecast the resurgence of the value factor and the relevant exchange-traded funds. That resurgence has been on display this year as investors are eschewing growth and momentum for value. Investors should consider boosting exposure to the value factor now before it gets too hot and they chase value when it is no longer offering, well, value.
However, that does not mean the standard value ETFs are the perfect avenues for exploiting this widely followed investment factor. Like other asset classes, value ETFs should not be seen as risk-free bets. In fact, there are some obvious risks associated with standard value ETFs at the moment, namely these ETFs&#39; often <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/03/7753638/why-now-for-value-etfs">significant combined allocations to the </a>financial services and energy sectors.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/03/7767189/a-value-etf-that-merits-further-examination">A Value ETF That Merits Further Examination</a></bzrelatedlink>
&ldquo;There is a possibility that the recent outperformance of value stocks was driven by a deeply oversold bounce in energy and this has the potential to be a &#39;junk rally.&#39; Energy and commodity related areas of the market could remain extremely volatile and investors should be careful about blindly seeking &#39;value&#39;,&rdquo; said State Street Vice President David Mazza <a href="http:// http://blog.spdrs.com/post/finding-the-signal-through-the-noise-a-value-etf-may-not-be-the-best-way-to-play-a-style-rotation">in a recent note</a>.
<h3>SDY Offers Value, Too</h3>
Another way of accessing value stocks without making a big bet on energy names is via dividend growth stocks and the corresponding ETFs. That includes the popular SPDR S&amp;P Dividend (ETF) (NYSE: <a class="ticker" href="/stock/sdy#NYSE">SDY</a>), one of the largest U.S. dividend ETFs.
SDY only holds stocks that a have a minimum dividend increase streak of 20 years. Due to the fact that the energy sector has been home to the bulk of negative U.S. dividend action for over a year, the sector&#39;s weight in SDY has dwindled to just over 3 percent. Eight sectors command larger weights n the ETF than energy.
Another critical element with dividend growth stocks is that these stocks perform <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/03/7753734/a-dependable-dividend-etf">notably less poorly</a> during bear markets. According to State Street data, the average drawdown for the S&amp;P 500 during its worst 15 months is almost 7.6 percent but the average drawdown for SDY&#39;s underlying index during those months was less than 5.8 percent.
&ldquo;Also, an emphasis on dividend growers can provide access to areas of the market that offer a relatively lower volatility profile and have exposure to attractively valued segments, while offering some growth potential due to their long history of paying dividends and managing balance sheets. The idea is to not pay too much for this quality growth,&rdquo; added Mazza.
Image Credit: <a href="https://pixabay.com/en/money-butterfly-origami-dollar-994845/">Public Domain</a>

Dividends

A Better Way To Play Value With ETFs

If there is one investment factor that is drawing plenty of attention this year it is the value factor. Adulation and attention for the value factor is deserved. After a multi-year stretch in which it lagged growth, momentum and other investment factors, value is back with a vengeance.
That much is confirmed by the iShares S&amp;P 500 Value Index (ETF) (NYSE: <a class="ticker" href="/stock/ive#NYSE">IVE</a>), one of the benchmark value ETFs. The $9.6 billion iShares S&amp;P 500 Value ETF is up 1.5 percent year-to-date compared to a paltry 0.2 percent gain for the S&amp;P 500.
<h3>The Strength Of Value</h3>
<a href="http://www.benzinga.com/trading-ideas/long-ideas/15/10/5895480/value-etfs-may-get-their-day-in-the-sun">Benzinga</a> forecast the resurgence of the value factor and the relevant exchange-traded funds. That resurgence has been on display this year as investors are eschewing growth and momentum for value. Investors should consider boosting exposure to the value factor now before it gets too hot and they chase value when it is no longer offering, well, value.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/03/7753571/a-new-emerging-markets-etf-with-a-volatility-focus">A New Emerging Markets ETF With A Volatility Focus</a></bzrelatedlink>
There is a strong case for long-term investors to be value investors. According to <a href="https://www.blackrockblog.com/2016/03/23/moment/">BlackRock</a> data, a $10,000 investment in value in 1979 was worth $566,000 at the end of last year.
&ldquo;We believe the recent overallocation to and performance strength in <a href="http://www.investopedia.com/terms/m/momentum.asp?layout=infini&amp;v=4A&amp;adtest=4A">momentum</a> and growth sets the stage for investor rebalancing. While the long-term path to value outperformance is not a straight line, and may be marked by alternating spates of value and growth leadership, we fully expect that investors are going to want and need to re-allocate back to value in their portfolio,&rdquo; according to a BlackRock note.
<h3>Allocation And Holdings</h3>
Data suggest investors are already revisiting the value factor, as IVE has added more than $446 million in new assets this year. As is the case with several of its rivals, IVE will need the energy and financial services sectors to perform well because those groups combine for 36.5 percent of IVE&#39;s weight. Including Exxon Mobil Corporation (NYSE: <a class="ticker" href="/stock/xom#NYSE">XOM</a>) and Wells Fargo &amp; Co (NYSE: <a class="ticker" href="/stock/wfc#NYSE">WFC</a>), six of IVE&#39;s top 10 holdings are energy or financial services names.
There is another reason to consider the value factor right now: Value often performs well after it has lagged for a while.
&ldquo;Some of the periods of greatest value underperformance are followed by some of the most significant periods of outperformance. While the timing is impossible to predict, it&rsquo;s not too great a leap to suggest we may be setting up for a rotation in favor of value stocks,&rdquo; added BlackRock.
Image Credit: <a href="https://pixabay.com/en/pocket-watch-flea-market-time-979241/">Public Domain</a>

Why Now For Value ETFs

This is the time of year when advisors and investors start talking about the tax implications facing portfolios, and that includes portfolios comprised of exchange-traded funds.
 Due to the fact that most ETFs are passively managed, capital gains distributions in this asset class are usually rare.
<h3>ETFs And Tax Implications</h3>
Distributions are paid to investors from the capital gains of the firm&#39;s investment portfolio. For example, when a mutual fund manager turns a profit on a trade and closes the position, the fund&#39;s shareholders, not the sponsor, are saddled with the tax liability. Most ETFs <a href="http://www.benzinga.com/markets/bonds/12/11/3095644/most-ishares-etfs-wont-have-2012-capital-gains-distributions">do not</a> distribute capital gains to investors, which makes the asset class typically more tax efficient than mutual funds.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/11/5979092/how-to-be-tax-savvy-with-an-mlp-etf">How To Be Tax Savvy With An MLP ETF</a></bzrelatedlink>
&ldquo;Moreover, ETFs are also generally more tax efficient than mutual funds because of how new ETF shares are created and redeemed. When an individual investor wants to sell an ETF, he simply sells it to another investor similar to a stock on an exchange. An authorized participant (AP) or broker dealer redeems shares of an ETF when there are more sellers than buyers.
&ldquo;But rather than iShares or Vanguard selling stocks to pay the AP in cash &ndash; as occurs with a mutual fund the asset manager simply pays the AP &lsquo;in kind&rsquo; by delivering the underlying holdings of the ETF itself. The asset manager can pick and choose which shares to give the AP those shares with the lowest possible tax basis. By not selling any shares, there is no capital gain incurred,&rdquo; said <a href="http://trymsatoday.com/">S&amp;P Capital IQ</a> in a note out Tuesday.
<h3>Tax Advantages</h3>
Limited portfolio turnover is a primary reason why passively managed ETFs have significant tax advantages of their <a href="http://www.benzinga.com/news/15/09/5829832/active-management-mediocrity-continues">actively managed</a> mutual fund rivals.
As S&amp;P Capital IQ noted, portfolio turnover for the popular Vanguard 500 Index Fund (NYSE: <a class="ticker" href="/stock/voo#NYSE">VOO</a>) is expected to be just 3 percent this year. That is a far cry from the Lipper large-cap core mutual fund average of 70 percent. 
<h3>Another Example</h3>
Even the $8.5 billion iShares S&amp;P 500 Value Index (ETF) (NYSE: <a class="ticker" href="/stock/ive#NYSE">IVE</a>) is expected to have limited portfolio turnover this year. As a strategic beta ETF, IVE&#39;s turnover in a given year is likely to be higher than a fund such as VOO, because more stocks will move in and out of IVE when the ETF rebalances to meet certain investment criteria. However, IVE&#39;s turnover is well below that of an equivalent actively managed mutual fund.
&ldquo;Even IVE that is rebalanced annually based on book value, P/E and other traits of the broader index&#39;s constituents, has a turnover rate of just 25 percent, well below the 52 percent Lipper large-cap value mutual fund peer average. Neither VOO nor IVE expects to incur a capital gain this year,&rdquo; said S&amp;P Capital IQ.
The research firm has Overweight ratings on both IVE and VOO.
Image Credit: <a href="https://pixabay.com/en/income-tax-calculation-calculate-491626/">Public Domain</a>

Education

Intraday Update

Expect Another Year Of Limited Capital Gains Taxes For ETFs

The value factor is one of the most widely followed investment factors, but for investors in mutual funds and exchange traded funds, a fund&#39;s performance and its fees are major factors in determining just how good of a value investors are getting.

	Investors in actively managed value mutual funds pay attention because there is an excellent chance you are getting a bad deal.

	"The average large-cap value mutual fund comes with a 1.1 percent expense ratio. Whether this seems high to you or not might depend on how well these funds have done relative to common benchmarks. We believe, semi-annual research from S&amp;P Dow Jones Indices, operating independently from S&amp;P Capital IQ, continually paints a stark picture that many of these funds may not be worth the cost,&rdquo; said <a href="http://trymsatoday.com/">S&amp;P Capital IQ</a> in a research note out Friday.&nbsp;

	To go along with those higher fees (1.1 percent per year means $110 for every $10,000 invested), investors are also being subjected to disappointing performance, something that is all too common <a href="http://www.benzinga.com/news/15/09/5829832/active-management-mediocrity-continues">in the world of actively managed funds</a>.&nbsp;

	"Just 30 percent of all large-cap value and 24 percent of all small-cap value funds outperformed the S&amp;P 500 Value and the S&amp;P SmallCap 600 Value indices, respectively,&rdquo; said S&amp;P Capital IQ.

	Small-cap value managers are not doing much better than broad small-cap managers, which have failed to beat their benchmarks an average of 80 percent of the time over the trailing five- and 10-year periods, according to S&amp;P Dow Jones Indices.

	Large-cap value managers are also better than diversified counterparts, though that is not saying much because the latter group fails to beat its benchmarks about 80 percent of the time over the past five and 10 years.

	The failures of active managers with the value factor enhance the utility of ETFs such as the $7.95 billion iShares S&amp;P 500 Value ETF (NYSE: <a class="ticker" href="/stock/ive#NYSE">IVE</a>). IVE tracks the S&amp;P 500 Value Index, the benchmark many active managers fail to beat. IVE has returned more than 40 percent over the past three years while charging just 0.18 percent per year.

	Over the same period, the iShares S&amp;P Small-Cap 600 Value ETF (NYSE: <a class="ticker" href="/stock/ijs#NYSE">IJS</a>) has returned north of 42 percent. Though that lags the performance of the broader S&amp;P SmallCap 600 Index, IJS has been a better, more cost-effective better than its actively managed counterparts.

	"The average small-cap value fund lagged by an even more egregious 364 basis points in the one-year period, considering the expense ratio is 1.36 percent. For perspective, iShares S&amp;P Small-Cap 600 Value, which has $3.2 billion in assets, incurs a 0.25 percent expense ratio,&rdquo; said S&amp;P Capital IQ.

	For the investor that wants to save every dollar possible,<a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5831187/market-maelstrom-shows-investors-prefer-etfs"> a fine idea</a>, Vanguard steps up to the plate with the Vanguard Value ETF (NYSE: <a class="ticker" href="/stock/vtv#NYSE">VTV</a>). The $18.3 billion VTV, the largest value ETF on the market, charges just 0.09 percent per year, less than 92 percent of rival funds.&nbsp;

	VTV is home to nearly 320 stocks, over 38 percent of which hail from either the financial services or health care sectors. Seven of the ETF&#39;s top 10 holdings, 25.8 percent of the fund&#39;s weight as of July 31, are Dow components.

iShares S&P SmallCap 600 Value Index Fund

Finding Value In Value ETFs

The energy sector has been trading sharply higher, as rising oil and natural gas prices create a sturdy tailwind for many of these integrated service and exploration companies. 

	After a frightening dip in January, that tested the 200-day moving average, the Energy Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xle#NYSE">XLE</a>) has rocketed to new all-time highs.  In fact, XLE has now gained over four percent in the month of April and more than 13 percent since its February low.  

	This ETF is the largest and most heavily traded large-cap energy index, which encapsulates 44 companies and over $10 billion in total assets. 

	<a href="http://www.benzinga.com/etfs/sector-etfs/14/03/4406920/uranium-etfs-are-coming-on-strong">Related: Uranium ETFs Are Coming On Strong</a>

	Many experts discounted the potential for the energy sector coming into 2014, as skepticism about the future of commodity prices weighed on revenue growth prospects. 

	However, since the beginning of the year, the United States Oil Fund (NYSE: <a class="ticker" href="/stock/uso#NYSE">USO</a>) has gained 6.12 percent and the United States Natural Gas Fund (NYSE: <a class="ticker" href="/stock/ung#NYSE">UNG</a>) has jumped nearly 26 percent.  Weather-related factors have played a big role in the first quarter surge for natural gas this year.  

	In addition, this sector has likely benefited from the rotation out of high-beta growth stocks and into value-oriented segments that are more defensive in nature.  The energy sector is the second largest allocation in the iShares S&amp;P 500 Value ETF (NYSE: <a class="ticker" href="/stock/ive#NYSE">IVE</a>), with more than 15 percent of the underlying holdings.  

	Moving forward, first quarter company earnings announcements are going to be a key driver of price appreciation in this sector.  

	Schlumberger Ltd (NYSE: <a class="ticker" href="/stock/slb#NYSE">SLB</a>) recently reported a record first quarter profit, as demand for its advanced energy exploration technology continues to grow. 

	SLB represents more than 20 percent of the MarketVectors Oil Services ETF (NYSE: <a class="ticker" href="/stock/oih#NYSE">OIH</a>) and is also a top component in XLE as well. 

	There are a number of different ETF alternatives to play the energy sector, depending on your preference of large integrated oil companies, master limited partnerships, or smaller equipment and exploration names.  

	In addition, you have the option to <a href="http://www.benzinga.com/general/education/14/04/4459266/how-etns-differ-from-etfs">invest directly in crude oil</a> or natural gas prices if you believe their upward momentum will continue. 

	This diversification and flexibility make ETFs an excellent choice for those seeking exposure to the energy theme.

Sector ETFs

Global

Energy ETFs Surge On Higher Commodity Prices

SPDR Dow Jones Industrial Average ETF Trust

Rydex ETF Trust Rydex S&P Equal Weight ETF

Top 10 U.S. Large & All Cap Sector ETFs

<a href="http://wallstreetsectorselector.com/wp-content/uploads/2011/10/NYSE-floor.jpg"><img class="aligncenter size-medium wp-image-131132" title="New York Stock Exchange" src="http://wallstreetsectorselector.com/wp-content/uploads/2011/10/NYSE-floor-300x196.jpg" alt="New York Stock Exchange" width="300" height="196" /></a>
<h4>Economic reports, earnings and Europe drive volatile action in the Dow Jones Industrials (AMEX: <a class="ticker" href="/stock/dia#AMEX">DIA</a>)</h4>
Economic reports were mostly negative this morning as the August Case/Shiller Index reported further year over year declines in home prices of -3.8% from August, 2010 versus a -3.5% forecast as the troubled real estate sector  (AMEX: <a class="ticker" href="/stock/iyr#AMEX">IYR</a>) continues to founder.
October Consumer Confidence declined to 39.8 compared to a 46.4 previous reading which is the lowest since the bottom of the financial crisis in March, 2009.  Readings of 90 or higher can be expected during “good” times.
October Richmond Federal Reserve index remained flat at -6.0, also in contraction territory.
Earnings reports makng headlines today were Netflix (NASDAQ: <a class="ticker" href="/stock/nflx#NASDAQ">NFLX</a>) getting pounded by more than 30% after a poor earnings forecast and reports of a plunding subscriber base.  UPS, an important member of the Transportation Sector sees modest growth ahead and the company's CEO says he's more optimistic than he was a few months ago.
<h5>But the big news remains Europe (AMEX: <a class="ticker" href="/stock/ive#AMEX">IVE</a>) as leaders struggle to contain the seemingly never ending debt crisis.  Multiple disagreements remain as tomorrow's all important summit looms.</h5>
<h5>Bottom Line:  Everything depends on Europe.</h5>
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iShares Trust Dow Jones US Real Estate Fund Index

Economics, Earnings and Europe

WisdomTree Trust WisdomTree SmallCap Dividend

DODGX

streetTRACKS Dow Jones U.S. Large Cap Value Index Fund

FCNTX

iShares S&P SmallCap 600 Growth Index Fund

iShares Trust Russell Midcap Growth Index Fund

iShares Trust Russell MidCap Value Index Fund

iShare Morningstar Large Growth Index Fund

iShares Morningstar Large Value Index Fund

iShares Morningstar Small Growth Index Fund

PowerShares Dynamic Developed International Opportunities Portfolio

PowerShares ETF Trust International Dividend Achievers Portfolio

PowerShares Exchange Traded Fund Dynamic Mid Cap Portfolio

PowerShares Exchange Traded Fund Dynamic Small Cap Portfolio

PowerShares Exchange Traded Fund Trust Dynamic Mid Cap Value Portfolio

PowerShares Exchange Traded Fund Trust Dynamic Small Cap Growth Portfolio

PowerShares Exchange Traded Fund Trust Dynamic Large Cap Value Portfolio

QQQQ

Rydex ETF Trust S&P Midcap 400 Pure Growth ETF

Rydex ETF Trust S&P Midcap 400 Pure Value ETF

Rydex ETF Trust S&P Smallcap 600 Pure Growth ETF

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