ETF Equity Exposure

The S&P 500 Value Index jumped 17.9% in the first half of the year, outperforming the broader S&P 500 by 110 basis points, and while there are recent inklings that growth stocks may be turning a corner, market observers are still bullish on value.

Share repurchase programs were among the investment victims of the coronavirus pandemic as companies looked for efficient avenues to rapidly conserve cash. As has been widely noted, neither the COVID-19 bear market nor subsequent recession were as bad or as lengthy as were expected.

While plenty of market participants are eager for growth stocks to come back into focus, investors shouldn’t be hasty in dismissing RZV and its heavily cyclical lineup. In fact, some analysts see more upside ahead for cyclical equities.

ETF investors seeking to capture the upside of small cap equities without the added dose of volatility can do so with the Invesco S&P SmallCap Low Volatility ETF ( XSLV B- ). As per the fund description, XSLV seeks to track the investment results of the S&P SmallCap 600 Low Volatility Index.

It’s often said that small cap value is one of the most potent factor combinations, one which handsomely rewards investors over the long-term. How well that thesis plays out over time remains to be seen, but for investors in 2021, small-cap value is obliterating other factors.

Until late last year, the growth factor spent over a decade outperforming its value rival. That scenario prompted advisors and investors to pump tens of billions of dollars into passive growth strategies, including exchange traded funds.

Exchange traded fund investors can focus on a mid-capitalization fund strategy targeting today’s high-conviction stock picks. In the recent webcast, Don’t Dilute Your Dollars with an Index-Only Strategy , Amy Zhang, Executive Vice President, Portfolio Manager, Alger, highlighted the historical outperformance of the mid cap category, which has generated an annualized total return of 12.3% from 1990 through 2020, compared to the 11.0% for small caps and 10.7% for large caps over the same period.

Inflation fears are constantly swirling in the capital markets, putting upward pressure on the U.S. dollar on the prospect of higher rates, which may help bolster the case for the Xtrackers MSCI EAFE Hedged Equity ETF (DBEF) . When the dollar rises, DBEF softens the blow for affected currencies in its underlying index, which is mainly comprised of developed countries.

As U.S. markets tumbled again on signs of inflationary pressures, investors worried about continued volatility can consider a targeted ETF strategy. Investors are refocused on the recent spike in inflation and whether or not rising consumer prices will stick around.

With mid caps soaring this year, volatility reduction may not be top of mind for many investors. Yet those those looking for engagement with an asset class with reduced turbulence can consider the Invesco S&P MidCap Low Volatility ETF (NYSEArca: XMLV) .

Finding value makes for a strong long-term investment, which could be why the VanEck Vectors Morningstar Wide Moat ETF (MOAT)   has been seeing strong fund flows the past month. Fundamental analysis involves finding value among companies that have a competitive advantage in their respective marketplace.

Until the last several months of 2020, value stocks had languished. The situation is finally improving, bringing with it better things for certain actively managed ETFs like the Fidelity Blue Chip Value ETF (FBCV) . 

Getting pure value in today’s market environment has been the prevailing trend with ETFs like the Invesco S&P 500 Pure Value ETF (RPV)  rising over 20% as the second quarter of 2021 gets underway. RPV seeks to track the investment results (before fees and expenses) of the S&P 500® Pure Value Index.