We recently published a list of Deep Value Stocks ETFs: Top 10 Picks. In this article, we are going to take a look at where iShares Russell 1000 Value ETF (NYSE:IWD) stands against other deep value ETFs to invest in.
This year, growth stocks are largely overvalued, trading at massive premiums compared to the riotous tech bubble of 2021. This is why Morningstar suggests that investors should underweight growth stocks in their portfolios and focus on value stocks instead. As of March 24, 2025, the Morningstar US Market Index saw the highest losses in artificial intelligence stocks, while undervalued stocks gained. Value stocks are trading at an impressive 13% discount to fair value. Thus, Morningstar advises investors to pick up small-cap stocks, which are trading at an 18% discount to fair value, compared to large and mid-cap equities, which trade at the same discount as the broader market.
William C. Nygren, partner, portfolio manager, and chief investment officer at Harris Associates, believes that it is an attractive time to be a value investor in this day and age because of the large spread in valuations between a few tech giants that drive the broader market and everything else. It is a golden time for value investors because the market is so concentrated, which means that cheap stocks are spread all across the other industries, allowing a unique opportunity to put together an investment portfolio comprising low P/E stocks. According to Nygren, it’s not just bank and oil stocks that look cheap right now. Consumer durables, healthcare, and media companies are also attractively valued. Since a value investor focuses on buying stocks that the market isn’t favoring at the moment, they get a much lower price. A value investor has to brave the odds, step in when others waver, and patiently wait for the market to reprice so their portfolio can thrive.
Similarly, veteran value investor Joel Greenblatt of Gotham Asset Management acknowledges that while value stocks have underperformed compared to their growth counterparts over the last two decades, investors who keenly observe and play the market can certainly prevail and outperform the broader market. Greenblatt’s Gotham Asset Management has returned a positive spread for the last three years, and the value investor noted that for a couple of mega stocks to consistently outperform the broader market is rather “abnormal”, possibly hinting that the market will reset its course.
Warren Buffett of Berkshire Hathaway
Our Methodology
We curated our list of the best deep value stocks ETFs by choosing consensus picks from multiple credible websites. We have mentioned the 5-year share price performance of each ETF as of April 6, 2025, ranking the list in ascending order of the share price performance. Additionally, we analyzed the top holdings of these ETFs to give investors deeper insights. Hedge fund sentiment from Insider Monkey’s Q4 2024 database is also included.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
iShares Russell 1000 Value ETF (NYSE:IWD)
5-Year Share Price Performance as of April 6: 56.48%
iShares Russell 1000 Value ETF (NYSE:IWD) aims to replicate the performance and investment results of the Russell Value Index, which consists of large- and mid-cap American value stocks. These companies are relatively undervalued compared to their market competitors. The ETF was established on May 22, 2000. As of April 1, 2025, the fund holds nearly $62 billion in net assets, with a portfolio comprising 870 holdings. IWD’s 30-day SEC yield stands at 1.79%, with a quarterly distribution frequency. The fund offers an expense ratio of 0.19%.
The biggest holding of iShares Russell 1000 Value ETF (NYSE:IWD) is Berkshire Hathaway Inc. (NYSE:BRK-B), which is one of the top deep value stocks. On January 24, UBS analyst Brian Meredith assigned a Buy rating to Berkshire Hathaway (class A shares), raising the price target from $796,021 to $803,444. UBS made the price adjustment after incorporating the expected insurance impact from the Los Angeles fires.
According to Insider Monkey’s fourth quarter database, 131 hedge funds reported owning stakes in Berkshire Hathaway Inc. (NYSE:BRK-B), up from 120 funds in the prior quarter. Bill & Melinda Gates Foundation Trust was the largest stakeholder of the company, with a position worth nearly $9 billion.
Overall, IWD ranks 10th among the Deep Value Stocks ETFs: Top 10 Picks. While we acknowledge the potential of deep value ETFs, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than IWD but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
