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Value ETFs

A value ETF screens its potential holdings based on how expensive a company's stock market price is using measures like price to earnings or price to book value. Value investing is one of the oldest investing approaches, made famous by Ben Graham and David Dodd in their 1934 value investing classic "Security Analysis" and later popularized by Warren Buffett and others. Fama French, in their influential 1993 publication of their "three factor" model, stated that small size and value were the two most important factors to explain the outperformance of stocks over long periods of time. So there are a lot of believers in value investing.

There are a large number of value ETFs, as shown in this table:

NameSymbolLast priceCurrencyAUMExpense ratio, %Inception date
Vanguard Value ETFXNYS:VTV138.33USD183,700,000,0000.04Jan 26, 2004
iShares Russell 1000 Value ETFARCX:IWD193.79USD62,802,698,9940.19May 26, 2000
Vanguard Small-Cap Value ETFARCX:VBR206.64USD57,600,000,0000.07Jan 26, 2004
iShares S&P 500 Value ETFARCX:IVE196.15USD36,302,585,4980.18May 26, 2000
Vanguard Mid-Cap Value ETFXNYS:VOE132.14USD30,900,000,0000.07Aug 17, 2006
SPDR Series Trust SPDR Portfolio S&P 500 Value ETFARCX:SPYV52.56USD25,824,920,0000.04Sep 25, 2000
iShares Core S&P U.S. Value ETFXNAS:IUSV95.25USD19,984,369,6340.04Aug 04, 2000
iShares MSCI EAFE Value ETFBATS:EFV54.50USD19,563,580,8000.33Aug 05, 2005
iShares Russell Mid-cap Value ETFARCX:IWS134.44USD14,033,678,4190.23Aug 02, 2001
iShares Russell 2000 Value ETFARCX:IWN168.28USD13,658,983,0240.24Jul 28, 2000
Schwab U.S. Large-Cap Value ETFARCX:SCHV27.21USD12,437,226,4960.04Dec 15, 2009
Avantis U.S. Small Cap Value ETFARCX:AVUV99.82USD12,277,335,1860.25Sep 26, 2019
Vanguard Russell 1000 Value ETFXNAS:VONV85.10USD11,100,000,0000.08Sep 20, 2010
Dimensional ETF Trust Dimensional US Marketwide Value ETFARCX:DFUV42.98USD10,684,137,0100.21May 09, 2022
Dimensional U.S. Targeted Value ETFARCX:DFAT57.74USD9,920,667,4630.28Jun 14, 2021
Capital Group Dividend Value ETFARCX:CGDV36.64USD9,346,927,6350.33Feb 24, 2022
Vanguard Mega Cap Value ETFARCX:MGV130.89USD8,600,000,0000.07Dec 17, 2007
iShares S&P Mid-Cap 400 Value ETFARCX:IJJ130.17USD8,217,850,1180.18Jul 28, 2000
iShares S&P SmallCap 600 Value ETFARCX:IJS111.60USD7,609,800,5020.18Jul 28, 2000
Dimensional International Value ETFARCX:DFIV37.13USD7,322,101,4240.27Sep 13, 2021
iShares MSCI USA Value Factor ETFBATS:VLUE111.04USD7,307,931,5760.15Apr 18, 2013
Avantis International Small Cap Value ETFARCX:AVDV66.47USD5,981,828,2020.36Sep 26, 2019
Vanguard S&P 500 Value ETFARCX:VOOV189.69USD5,500,000,0000.10Sep 07, 2010
SPDR S&P 600 Small Cap Value ETF (based on S&P SmallCap Value Index--symbol--CVKARCX:SLYV89.67USD4,332,040,0000.15Sep 25, 2000
Avantis U.S. Large Cap Value ETFARCX:AVLV69.84USD4,038,935,2700.15Sep 23, 2021
SPDR S&P 400 Mid Cap Value ETF (based on S&P MidCap 400 Value Index--symbol: MGDARCX:MDYV83.64USD3,983,110,0000.15Nov 08, 2005
Dimensional ETF Trust Dimensional US Small Cap Value ETFARCX:DFSV31.88USD3,334,768,1500.31Feb 24, 2022
iShares Russell Top 200 Value ETFARCX:IWX83.04USD2,381,572,8940.20Sep 28, 2009
Dimensional ETF Trust Dimensional US Large Cap Value ETFARCX:DFLV31.51USD2,207,681,1770.22Dec 07, 2022
Dimensional ETF Trust Dimensional International Small Cap Value ETFBATS:DISV27.31USD2,109,131,9890.42Mar 24, 2022
Invesco S&P 500 Pure Value ETFXNYS:RPV90.13USD2,077,175,1590.35Mar 01, 2006
The 2023 ETF Series Trust Eagle Capital Select Equity ETFARCX:EAGL29.55USD2,022,592,6400.80Mar 25, 2024
Fidelity Covington Trust Fidelity Enhanced Large Cap Value ETFARCX:FELV31.85USD1,897,815,5210.18Nov 20, 2023
iShares MSCI Intl Value Factor ETFARCX:IVLU28.01USD1,816,725,7700.30Jul 15, 2015
Nuveen ESG Large-Cap Value ETFBATS:NULV40.86USD1,678,253,2220.26Jan 10, 2017
JPMorgan Active Value ETFARCX:JAVA66.44USD1,433,407,5000.44Oct 05, 2021
Vanguard S&P Small-Cap 600 Value ETFARCX:VIOV95.88USD1,400,000,0000.15Sep 07, 2010
EA Bridgeway Omni Small-Cap Value ETFXNAS:BSVO22.20USD1,325,775,5870.47Mar 13, 2023
American Century ETF Trust Avantis U.S Small Cap Equity ETFARCX:AVSC55.86USD1,198,774,8630.25Jan 13, 2022
First Trust Large Cap Value AlphaDEX FundXNAS:FTA79.35USD1,170,197,5990.60May 24, 2007
iShares Morningstar Large-Cap Value ETFARCX:ILCV83.60USD1,043,515,5120.04Jul 13, 2004
Invesco Large Cap Value ETFARCX:PWV59.42USD1,007,406,4200.50Mar 03, 2005
Vanguard S&P Mid-Cap 400 Value ETFARCX:IVOV99.73USD1,000,000,0000.15Sep 07, 2010
Putnam Focused Large Cap Value ETFARCX:PVAL38.99USD990,586,3030.56May 26, 2021
Fidelity Value Factor ETFARCX:FVAL63.99USD949,180,1120.16Sep 15, 2016
Vanguard Russell 2000 Value ETFXNAS:VTWV148.23USD896,500,0000.15Sep 20, 2010
Invesco S&P SmallCap Value with Momentum ETFARCX:XSVM55.34USD858,925,0000.29Mar 03, 2005
Vanguard U.S. Value Factor ETFBATS:VFVA123.53USD776,200,0000.13Feb 13, 2018
Dimensional ETF Trust Dimensional Emerging Markets Value ETFARCX:DFEV26.59USD679,212,7030.43Apr 27, 2022
iShares Morningstar Mid-Cap Value ETFXNAS:IMCV77.10USD661,989,2990.06Jul 13, 2004
JPMorgan U.S. Value Factor ETFARCX:JVAL45.13USD601,028,0000.12Nov 09, 2017
Goldman Sachs ETF Trust Goldman Sachs MarketBeta Russell 1000 Value Equity ETFARCX:GVUS49.83USD485,350,0000.12Nov 30, 2023
Avantis Emerging Markets Value ETFARCX:AVES46.46USD474,862,0000.36Sep 30, 2021
SEI Enhanced U.S. Large Cap Value Factor ETFBATS:SEIV34.47USD474,435,4450.15May 18, 2022
iShares Morningstar Small-Cap Value ETFARCX:ISCV65.53USD457,768,1800.06Jul 13, 2004
SPDR S&P 1500 Value Tilt ETFARCX:VLU192.02USD396,040,0000.12Oct 24, 2012
Nuveen ESG Mid-Cap Value ETFBATS:NUMV36.28USD383,819,8730.31Dec 20, 2016
Avantis International Large Cap Value ETFARCX:AVIV53.96USD383,311,8450.25Sep 30, 2021
WisdomTree U.S. AI Enhanced Value FundARCX:AIVL110.89USD380,223,4200.38Jun 16, 2006
Opus Small Cap Value ETFBATS:OSCV37.92USD373,174,6420.80Jul 18, 2018
Bushido Capital US Equity ETFXNAS:SMRI32.65USD357,034,9760.71Sep 14, 2023
Alpha Architect U.S. Quantitative Value ETFBATS:QVAL46.17USD342,872,8000.29Oct 22, 2014
WisdomTree U.S. Value FundARCX:WTV87.17USD324,420,8610.12Feb 23, 2007
Invesco S&P Midcap 400 Pure Value ETFARCX:RFV127.54USD291,610,2990.35Mar 01, 2006
Invesco S&P MidCap Value with Momentum ETFARCX:XMVM57.04USD277,399,4300.29Mar 03, 2005
Invesco S&P Smallcap 600 Pure Value ETFARCX:RZV114.09USD270,948,3720.35Mar 01, 2006
iShares MSCI Japan Value ETFXNAS:EWJV31.48USD266,080,9800.15Mar 07, 2019
American Century Focused Large Cap Value ETFARCX:FLV69.37USD224,830,4470.42Apr 02, 2020
American Century U.S. Quality Value ETFARCX:VALQ63.31USD221,700,7620.29Jan 16, 2018
First Trust Mid Cap Value AlphaDEX FundXNAS:FNK55.32USD212,261,2030.70Apr 20, 2011
iShares Trust iShares International Developed Small Cap Value Factor ETFBATS:ISVL35.15USD190,764,4900.30Mar 30, 2021
EA Series Trust Euclidean Fundamental Value ETFARCX:ECML32.99USD185,909,8030.95May 23, 2023
Fidelity International Value Factor ETFARCX:FIVA25.21USD179,003,5940.18Jan 25, 2018
Hartford Funds Exchange-Traded Trust Hartford Quality Value ETFBATS:QUVU25.39USD177,136,7770.45Oct 16, 2023
Tidal ETF Trust Gotham 1000 Value ETFARCX:GVLU24.59USD173,287,0000.50Jun 08, 2022
First Trust Small Cap Value AlphaDEX FundXNAS:FYT56.20USD172,220,8550.70Apr 20, 2011
iShares US Small Cap Value Factor ETFBATS:SVAL33.10USD158,582,8800.20Oct 29, 2020
Brandes International ETF Brandes U.S. Value ETFBATS:BUSA33.34USD154,965,8600.60Oct 09, 2023
First Trust Multi Cap Value AlphaDEX FundXNAS:FAB85.11USD140,383,4100.64May 11, 2007
Alpha Architect International Quantitative Value ETFBATS:IVAL24.44USD136,773,0000.39Dec 17, 2014
Fidelity Blue Chip Value ETFBATS:FBCV32.52USD126,768,4020.59Jun 05, 2020
BrandywineGLOBAL-Dynamic US Large Cap Value ETFXNAS:DVAL14.14USD120,493,1130.49Oct 31, 2022
Brandes International ETF Brandes International ETFBATS:BINV30.98USD113,395,8000.70Oct 09, 2023
Two Roads Shared Trust Conductor Global Equity Value ETFXNYS:CGV12.68USD110,437,6241.25Aug 01, 2022
Invesco S&P 500 Enhanced Value ETFARCX:SPVU51.68USD101,023,7010.13Oct 09, 2015
Cambria Global Value ETFBATS:GVAL21.89USD96,174,9510.64Mar 12, 2014
American Century ETF Trust Avantis All Equity Markets Value ETFARCX:AVGV63.33USD88,543,7870.26Jun 29, 2023
Absolute Select Value ETFARCX:ABEQ32.55USD86,856,0000.85Jan 22, 2020
Brookstone Value Stock ETFBATS:BAMV31.79USD76,856,0000.95Sep 27, 2023
T. Rowe Price Exchange-Traded Funds, Inc. T. Rowe Price Value ETFARCX:TVAL32.48USD76,585,3120.33Jun 16, 2023
WisdomTree International AI Enhanced Value FundARCX:AIVI40.77USD70,587,4750.58Jun 16, 2006
Principal Value ETFXNAS:PY51.20USD69,887,3760.15Mar 22, 2016
Brandes International ETF Brandes U.S. Small-Mid Cap Value ETFBATS:BSMC31.57USD62,853,9400.70Oct 09, 2023
AAM S&P 500 High Dividend Value ETFARCX:SPDV34.20USD59,463,2500.29Nov 29, 2017
Madison ETFs Trust Madison Dividend Value ETFARCX:DIVL22.23USD57,028,1920.65Aug 15, 2023
EA Series Trust Strive 1000 Value ETFXNYS:STXV30.76USD54,678,9120.18Nov 11, 2022
Columbia Research Enhanced Value ETFARCX:REVS25.98USD53,280,0000.19Sep 25, 2019
Advisor Managed Portfolios Miller Value Partners Appreciation ETFARCX:MVPA36.18USD51,231,6910.60Jan 31, 2024
The Acquirers FundARCX:ZIG39.38USD46,878,8170.84May 15, 2019
American Century ETF Trust Avantis U.S. Mid Cap Value ETFARCX:AVMV69.18USD43,799,3420.20Nov 09, 2023
Invesco S&P 500 Value with Momentum ETFARCX:SPVM59.47USD39,819,7800.29Jun 16, 2011
ETRACS 2x Leveraged US Value Factor TR ETNARCX:IWDL42.03USD35,840,4000.95Feb 09, 2021
KraneShares Value Line Dynamic Dividend Equity Index ETFARCX:KVLE26.18USD33,494,5970.56Nov 24, 2020
WBI BullBear Value 3000 ETFARCX:WBIF29.63USD31,793,1371.64Aug 27, 2014
Roundhill Acquirers Deep Value ETFARCX:DEEP34.82USD31,390,8300.80Sep 23, 2014
Royce Quant Small-Cap Quality Value ETFXNAS:SQLV43.78USD27,377,1140.60Jul 13, 2017
John Hancock Exchange-Traded Fund Trust John Hancock Disciplined Value International Select ETFARCX:JDVI26.67USD26,337,7000.69Dec 20, 2023
iShares Focused Value Factor ETFARCX:FOVL73.46USD25,602,8990.25Mar 21, 2019
J.P. Morgan Exchange-Traded Fund Trust JPMorgan Active Small Cap Value ETFARCX:JPSV59.77USD14,677,0000.74Mar 08, 2023
PGIM ETF Trust PGIM Jennison Focused Value ETFARCX:PJFV73.68USD14,340,4800.75Dec 14, 2022
EA Series Trust Morgan Dempsey Large Cap Value ETFBATS:MDLV26.43USD12,393,2640.59Apr 27, 2023
iShares Trust iShares ESG Aware MSCI USA Value ETFBATS:EVUS29.97USD8,434,6190.18Feb 02, 2023
AAM S&P Emerging Markets Sector High DividendARCX:EEMD20.09USD7,598,8720.49Nov 30, 2017
iShares Large Cap Value Active ETFARCX:BLCV32.96USD7,102,5380.46May 23, 2023
Lattice Strategies Trust Hartford US Value ETFBATS:VMAX50.68USD6,050,4430.29Dec 06, 2023
DBX ETF Trust Xtrackers S&P 500 Value ESG ETFBATS:SNPV32.91USD6,042,8300.15Nov 10, 2022
Federated Hermes ETF Trust Federated Hermes MDT Large Cap Value ETFARCX:FLCV28.34USD5,229,5700.32Jul 31, 2024
American Century ETF Trust Avantis All International Markets Value ETFARCX:AVNV56.50USD3,226,0250.34Jun 29, 2023
Foundations Dynamic Value ETFBATS:FDVL10.74USD2,282,9310.79Oct 16, 2023
AAM S&P Developed Markets High Dividend ValueARCX:DMDV23.63USD2,002,5000.39Nov 28, 2018
ClearBridge Focus Value ESG ETFBATS:CFCV38.08USD1,563,5600.48Jun 02, 2020
Jive Software IncXNAS:JIVEUSD
ETF Opportunities Trust Cultivar ETFBATS:CVAR25.81USD
Fidelity Covington Trust Fidelity Fundamental Large Cap Value ETFBATS:FFLV22.18USD
VanEck ETF Trust VanEck Morningstar Wide Moat Value ETFBATS:MVAL32.78USD
Simplify Exchange Traded Funds Simplify Next Intangible Value Index ETFBATS:NXTV26.35USD
Investment Managers Series Trust III FPA Global Equity ETFBATS:FPAG31.86USD

Value versus pure value indexes

Each of the major index providers has their own approach to creating a value index. But generally speaking, during the 1990's the index providers adopted a fairly consistent approach to creating "value" and "growth" indexes. Generally speaking, every stock in an index universe, such as the S&P 500 Index, was classified into one of three buckets: 1) stocks that were primarily value stocks; 2) stocks that were primarily growth stocks; and 3) stocks that were not strongly growth or value stocks. This third category of stocks was labeled either "core" or "blend" or "neither" stocks.

When creating a "value" index during the 1990's, most index providers included in the "value" index stocks from the value bucket and stocks from the "blend" or "core" bucket (buckets #1 and #3). At the same time, most index providers created a second "pure value" index that included only the stocks in the "value" index.

SPYV, the SPDR S&P 500 Value ETF, is a good example of an ETF that follows a "value" index, while RPV, the Guggenheim S&P 500 Pure Value ETF, follows the "pure value" index.

In the past ten years, this older framework of everything being a "value" or a "growth stock" has been largely superseded by the concept of multi-factor investing, or smart beta investing. But many of these older "value" and "growth" ETFs continue to be around and continue to have a large amount of assets under management.

Does value investing work?

Let's look first at the performance of some of the oldest value ETFs. Many of the value ETFs have performed really well. What makes it difficult to analyze, however, is that most of these well performing value ETFs are also small and mid cap ETFs, or total market ETFs. Did they outperform because of the size factor or the value factor?

If you look at price charts of some of the oldest value ETFs against their respective benchmarks, the performance of value ETFs is not that amazing. If the value factor exists, it is difficult to tell from current price charts.

If the value factor exists, it is subtle. Or perhaps no longer exists as a significant factor because over time too many investors have used value investing such that it has been "played out". Or perhaps it has been out of favor for a while, but will eventually come back.

Academic factor research has also "waffled" a little bit on whether the value factor is important. In their five factor model, Fama French state that the value factor (what they call HML) is redundant: "the five-factor model never improves the description of average returns from the four-factor model that drops HML (Table 5). The explanation is interesting. The average HML return is captured by the exposures of HML to other factors. Thus, in the five-factor model, HML is redundant for describing average returns, at least in U.S. data for 1963–2013." Hou Xue and Zhang don't use value as a factor in their updated four factor model published in 2015.

Perhaps the value premium exists but it is so closely tied to the size factor that it is difficult to isolate. Fama French state in their 5 factor model:

The value, profitability, and investment factors are averages of small and big stock factors. Here again, joint controls produce interesting changes in the premiums for small and big stocks (Panel A of Table 4). The factors from the 2 3 and 2 2 sorts confirm earlier evidence that the value premium is larger for small stocks (e.g., Fama and French, 1993, 2012; Loughran, 1997).