In this article, we discuss the 5 best value ETFs to invest in. If you want to read about some more value ETFs, go directly to 10 Best Value ETFs To Invest In.
5. Avantis U.S. Small Cap Value ETF (NYSE:AVUV)
Avantis U.S. Small Cap Value ETF (NYSE:AVUV) is an exchange traded fund that, under normal market conditions, invests at least 80% of its assets in small capitalization stocks across all industries and sectors in the United States. The fund also invests in derivative instruments such as futures contracts, currency forwards, and swap agreements.
Avantis U.S. Small Cap Value ETF (NYSE:AVUV) holds a large stake in Louisiana-Pacific Corporation (NYSE:LPX), a Tennessee-based manufacturer of building products for construction, repair and remodeling, and outdoor structures. On June 23, TD Securities analyst Sean Steuart lowered the price target on Louisiana-Pacific Corporation (NYSE:LPX) to $75 from $85 but maintained a Buy rating on the shares. He lowered target prices for seven of the 10 companies in his coverage universe, noting that forest product equities remain under pressure as investors discount an increasingly negative macroeconomic outlook. However, Steuart reiterates an Overweight bias on the sector given that balance sheets are in significantly better shape than was the case entering previous recessions.
Among the hedge funds tracked by Insider Monkey, 34 funds were long Louisiana-Pacific Corporation (NYSE:LPX) at the end of March 2022, with collective stakes worth $427.8 million. In the first quarter of 2022, Noam Gottesman’s GLG Partners held a prominent position in the company, with 756,178 shares worth about $47 million.
Here is what L1 Capital has to say about Louisiana-Pacific Corporation (NYSE:LPX) in its Q3 2021 investor letter:
“We reinvested the proceeds from the partial sale of Eagle Materials by increasing the Fund’s position in Louisiana-Pacific Corporation. We expect the company to deliver strong earnings and cash flow over coming years, and the company remains undervalued at its current share price.”
4. Invesco S&P 500 Pure Value ETF (NYSE:RPV)
Invesco S&P 500 Pure Value ETF (NYSE:RPV) is an exchange traded fund that invests at least 90% of its total assets in the securities of the S&P 500 Pure Value Index while tracking the performance of the index. Approximately 30.44% of the fund’s total assets are concentrated around the financial services sector.
Marathon Petroleum Corporation (NYSE:MPC), a top holding of the ETF, is the largest refiner of crude oil in the United States. It deals in the transportation and marketing of petroleum products in the nation and internationally. BMO Capital analyst Phillip Jungwirth initiated coverage of Marathon Petroleum Corporation (NYSE:MPC) with an Outperform rating and $135 price target on June 13. The analyst is positive on the company’s leading share buyback program, which he expects to have increasing sustainability given its “robust free cash flow profile” in 2022 and 2023. Jungwirth adds that Marathon Petroleum Corporation (NYSE:MPC) shares “still look inexpensive”.
Insider Monkey found 43 hedge funds long Marathon Petroleum Corporation (NYSE:MPC) at the close of Q1 2022. The total stakes of these hedge funds were valued at $2.51 billion. This is compared to 41 positions in the previous quarter with stakes of $2.22 billion. As of March 31, Elliott Management is the top stakeholder in Marathon Petroleum Corporation (NYSE:MPC) with stakes of $946.05 million.
Clark Street Value, an investment management firm, mentioned Marathon Petroleum Corporation (NYSE:MPC) in its Q4 2021 investor letter, stating:
“During the worst of covid, I bought some LEAPs on Marathon Petroleum (MPC) as a proxy for Par Pacific (PARR) since long dated options weren’t available on the later. Those MPC calls expire next month and I’ll take profits, with PARR I’ve reduced my position throughout the year and might sell the rest early next year, I’ve owned it for 6-7 years and it has gone nowhere, they haven’t touched the NOLs, just a difficult business that I probably don’t understand as well as I should.”
3. SPDR S&P 600 Small Cap Value ETF (NYSE:SLY)
The SPDR S&P 600 Small Cap Value ETF (NYSE:SLY) seeks to provide investment results that correspond generally to the total return performance of the S&P SmallCap 600 Index, which includes U.S. companies typically between $600 million and $2.4 billion in market value. The fund holds 475 stocks with an average P/E of about 15, and invests heavily in the financials and industrial sectors, which make up 16.98% and 15.3% of the fund’s portfolio, respectively.
One of the largest holdings of the ETF is Lantheus Holdings, Inc. (NASDAQ:LNTH), a holding company that provides innovative diagnostics, targeted therapeutics and artificial intelligence (AI) solutions. Earlier this May, B. Riley analyst Justin Walsh initiated coverage of Lantheus Holdings, Inc. (NASDAQ:LNTH) with a Buy rating and $91 price target. Lantheus, which he calls the “leading diagnostic imaging and nuclear medicine company,” is well positioned in the rapidly growing radiopharmaceutical space and is expected to nearly double revenues in FY22 given the expected strong launch of prostate cancer imaging agent Pylarify, Walsh tells investors.
According to Insider Monkey’s database, Lantheus Holdings, Inc. (NASDAQ:LNTH) was in 35 hedge fund portfolios at the end of the first quarter of 2022, compared to 15 funds in the previous quarter. Israel Englander’s Millennium Management is the leading shareholder of the company, with a stake worth approximately $92.83 million.
Here is what Clearbridge Investments Small Cap Strategy has to say about Lantheus Holdings, Inc. (NASDAQ:LNTH) in its Q1 2022 investor letter:
“While companies with immature business models and no profits exist throughout the market, there are certain sectors where they congregate more easily, such as health care. As access to cheap capital recedes, however, many of these specialty drug and biotech companies will likely find it challenging to dismiss long periods of unprofitability. While we have had limited exposure in the sector, our focus on finding high-quality companies at attractive valuations has yielded positive results. For example, Lantheus Holdings (NASDAQ:LNTH) is a global leader in medical diagnostic imaging whose core business suffered during the COVID-19 pandemic due to a dramatic decline in hospital visits. As hospitals return to a level of normalcy, Lantheus’s core business has rebounded. Additionally, in late 2021 the company received approval for its new radio-pharmacological drug, Pylarify, for the treatment of prostate cancer, and initial sales have been well ahead of expectations. We believe it has a strong future in oncology diagnosis and treatment. As a result, Lantheus was our strongest individual performer for the first quarter.”
2. Invesco S&P 500 Enhanced Value ETF (NYSE:SPVU)
The Invesco S&P 500 Enhanced Value ETF (NYSE:SPVU) is based on the S&P 500 Enhanced Value Index and tracks the performance of stocks in the S&P 500 Index that have the highest “value score.” The fund generally will invest at least 90% of its total assets in common stocks that comprise the index. The fund tends to dip deeper when value is weak, but also explodes higher when value is back in style. That includes its performance in 2020, when it dropped peak-to-trough by 10% more than its peers, but also since then, rebounding by about 35% better. The fund’s portfolio is split roughly 70/30 between large and mid-cap stocks, and it has a heavy overweight in the financials sector, followed by the healthcare sector.
CVS Health Corporation (NYSE:CVS) is one of the main holdings of Invesco S&P 500 Enhanced Value ETF (NYSE:SPVU). It operates a network of retail pharmacies and clinics across the United States. The brands that operate under the company include CVS Pharmacy, CVS Caremark, MinuteClinic, and Omnicare. On June 16, Loop Capital analyst Joseph France initiated coverage of CVS Health Corporation (NYSE:CVS) with a Buy rating and $120 price target. The company is well-positioned in its core markets, and with less debt and stronger earnings growth, it can afford more strategic acquisitions, the analyst tells investors in a research note. France also expects CVS Health Corporation (NYSE:CVS)’s insurance business to capitalize on the growth of the Medicare market.
Of the 912 elite hedge funds tracked by Insider Monkey, 72 reported holding shares of CVS Health Corporation (NYSE:CVS), with combined positions worth $1.56 billion. This is in comparison to 71 hedge funds a quarter earlier. Harris Associates was the biggest shareholder of CVS Health Corporation (NYSE:CVS) at the end of the first quarter, with a stake worth $421 million.
Here is what ClearBridge Investments had to say about CVS Health Corporation (NYSE:CVS) in its Q4 2021 investor letter:
“Improving health remains a key impact theme for the portfolio, and over the past year or so we have increased our exposure to the health care sector, through the addition of CVS Health, which is well-positioned to help define the future of health care in terms of costs, quality and convenience.”
1. Vanguard Mega Cap Value Index Fund (NYSE:MGV)
Vanguard Mega Cap Value Index Fund (NYSE:MGV) is a fund that tracks the performance of the CRSP US Mega Cap Value Index. The index is a float-adjusted, market-capitalization-weighted index designed to measure the equity market performance of mega-capitalization value stocks in the United States. The fund holds each stock in almost the same proportion as the weighting of the stock on the index.
One of the biggest holdings of Vanguard Mega Cap Value Index Fund (NYSE:MGV) is UnitedHealth Group Incorporated (NYSE:UNH), a Minnesota-based managed healthcare and insurance company that offers healthcare products and insurance services to consumers. On June 16, Loop Capital analyst Joseph France initiated coverage of UnitedHealth Group Incorporated (NYSE:UNH) with a Buy rating and $575 price target. The analyst said UnitedHealth Group Incorporated (NYSE:UNH) is one of the best-positioned managed care names, with leading positions in commercial and government benefits markets. France added that he believes the company’s scale, industry leadership and innovative technology and practices constitute “major” competitive advantages.
As per Insider Monkey’s Q1 2022 data, UnitedHealth Group Incorporated (NYSE:UNH) was a popular stock among elite funds, as 103 hedge funds owned stakes in the company, up from 96 in the previous quarter. The collective value of these stakes is nearly $13 billion. With 3 million shares worth $1.48 billion, Eagle Capital Management was the company’s largest stakeholder in Q1.
Baron Funds mentioned UnitedHealth Group Incorporated (NYSE:UNH) in its Q1 2022 investor letter. Here is what the firm has to say:
“UnitedHealth Group Incorporated is a leading diversified health and well- being company whose divisions include insurance arm United Healthcare and Optum, which offers care delivery and other services. Shares increased on a fourth quarter beat and a reaffirmation of what is likely conservative guidance for 2022. We believe UnitedHealth leads the health care industry in innovation and execution, as evidenced by its strong value proposition leading to Medicare Advantage share gains, strong cost controls, and its leadership position in the shift to value-based care.”
