Intro
May 17, 2021: An analysis of investment flows last week by US site etf.com shows renewed interest in value ETFs at the expense of growth ETFs. Thus, 2 popular American ETFs: iShares MSCI USA Value Factor ETF (VLUE) and the SPDR S&P 400 Mid Cap Value ETF (MDYV) recorded significant positive flows.
Both Value stocks or ETFs are considered by investors to be more suitable in an environment marked by inflation and rising interest rates. This explains the strategic reallocation operated by major players in the market. In this article, we will review the value ETFs offering in the Canadian market. For each fund, we will summarize the most relevant information (Performance, Costs and strategy). The same information will be provided for the two most popular funds in the United States.
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What is a Value Strategy
Value ETFs adopt an investment strategy based on acquiring undervalued securities in the market. These securities are commonly referred as “Value stocks”. The principle is simple:
• Determine the true value of a security using the present value of future earnings and cashflows;
• Wait until this security is on sale! Indeed, the markets vary according to the good or bad news that emerges. These variations are in the great majority of the time excessive. Therefore, an investor who follows this strategy will wait for the right time to acquire these securities.
List of available Value ETFs in Canada and US
See below for a list of most popular value ETFs listed on the Canadian market. The main difference between these funds is their geographic coverage. It’s up to you to choose the one that best suits your needs. Keep in mind the tax impact when investing in funds with foreign content.
| Symbol – Name | AUM* in M | Manag fees |
| VXM – B CI First Asset Morningstar Intl Value Unheg | 639 | 0.60% |
| FXM – CI First Asset Morningstar Cda Value | 232 | 0.60% |
| VVL – Vanguard Glob Val Factor | 150 | 0.35% |
| ZVU – BMO MSCI USA Value Index | 87 | 0.30% |
| XCV Ishares Canadian Value Index | 74 | 0.50% |
| US listed ETFs | ||
| VLUE – iShares MSCI USA Value Factor ETF | 16,529 | 0.15% |
| MDYV – SPDR S&P 400 Mid Cap Value ETF | 2,409 | 0.15% |
Source: Barchart.com / AUM: assets under management in millions
• VVL Vanguard Glob Val Factor and ZVU BMO MSCI USA Value Index have the lowest management fees in Canada;
• VXM-B CI First Asset Morningstar Intl is Canada’s most popular fund with over $ 600 Million in assets under management.
Historical performance
| Symbol | Last | YTD* %Chg | 52 W %Chg | Div Yld |
| VXM-B | 25.36 | 7.55 | 26.11 | 1.96 |
| FXM | 19.12 | 19.13 | 62.31 | 2.18 |
| VVL | 38.37 | 20.96 | 66.90 | 1.41 |
| ZVU | 26.12 | 16.92 | 40.88 | 2.14 |
| XCV | 29.65 | 19.32 | 50.28 | 2.78 |
| US ETFs | ||||
| VLUE | 106.34 | 22.75 | 60.36 | |
| MDYV | 69.49 | 26.14 | 88.71 |
Source: Brachart.com / YDT: Since the beginning of the year
FXM CI First Asset Morningstar Cda Value and VVL Vanguard Glob Val Factor had the best performance whether since the start of the year or in the last 52 weeks.
VXM-B CI First Asset Morningstar Intl Value Unheg
VXM-B invests in developed markets outside the United States and Canada. It is an index fund that tracks the performance of the Morningstar® Developed Markets Index® Outside North America Target ValueTM Index.
Securities are considered “good value” based on characteristics such as low price-to-earnings and price-to-cash flow ratios.
Portfolio dated May 14:
| Nom | % |
| BANCA POPOLARE DI SONDRIO | 0,76 |
| BANCO DE SABADELL SA | 0,71 |
| FERREXPO PLC | 0,68 |
| BCO COM PORTUGUES EUR 1.125 | 0,65 |
| BW LPG LTD USD 0.01 144A | 0,65 |
| NIPPON YUSEN KABUSHIKI KAISH | 0,64 |
| MITSUI OSK LINES LTD | 0,62 |
| SANDFIRE RESOURCES NL | 0,61 |
| MEKONOMEN AB | 0,60 |
| FRESENIUS SE & CO KGAA | 0,59 |
| BILIA AB NPV | 0,59 |
FXM – CI First Asset Morningstar Cda Value
The Fund is designed to provide diversified exposure to Canadian issuers that are considered “good value” based on characteristics such as low price-to-earnings and price-to-cash flow ratios.
| Nom | % |
| ARC RESOURCES LTD | 7,28 |
| POWER CORP CANADA | 3,74 |
| WESTON (GEORGE) LTD | 3,69 |
| GREAT WEST LIFECO INC | 3,62 |
| KEYERA CORP | 3,61 |
| ALTAGAS LTD | 3,61 |
| EQUITABLE GROUP INC | 3,56 |
| KINROSS GOLD CORP | 3,54 |
| ATCO LTD | 3,52 |
VVL – Vanguard Glob Val Factor
Vanguard Global Value Factor ETF seeks to provide long-term capital appreciation by seeking to capture the potential for excess return generated by investing in developed market equity securities around the world that are low relative to their parameters. fundamentals.
Geographical distribution
| Country | Weight |
| États-Unis | 64,3 % |
| Japon | 7,9 % |
| Royaume-Uni | 4,9 % |
| Corée | 3,9 % |
| Canada | 3,1 % |
| France | 3,0 % |
| Allemagne | 2,6 % |
| Italie | 1,6 % |
| Hong Kong | 1,2 % |
| Pays-Bas | 1,0 % |
Holdings as of May 14th
| Name | % Weight |
| Verizon Communications Inc. | 0,50 % |
| Royal Dutch Shell plc | 0,50 % |
| AT&T Inc. | 0,50 % |
| CVS Health Corp. | 0,50 % |
| FedEx Corp. | 0,50 % |
| Bristol-Myers Squibb Co. | 0,50 % |
| Walgreens Boots Alliance Inc. | 0,50 % |
| Ford Motor Co. | 0,50 % |
| General Motors Co. | 0,50 % |
| Volkswagen AG | 0,50 % |
ZVU – BMO MSCI USA Value Index
BMO MSCI U.S. Value Index ETF invests in U.S. equities exhibiting high value characteristics based on three variables: price to book ratio, future price to earnings ratio and value to cash flow from operations. business.
Portfolio dated May 14, 2021
| Weight (%) | Name |
| 6,87% | AT&T INC |
| 6,74% | INTEL CORP |
| 3,58% | MICRON TECHNOLOGY INC |
| 3,45% | GENERAL MOTORS CO |
| 3,08% | INTERNATIONAL BUSINESS MACHINES CORP |
| 2,35% | CITIGROUP INC |
| 2,12% | TARGET CORP |
| 2,12% | CISCO SYSTEMS INC/DELAWARE |
| 1,88% | APPLIED MATERIALS INC |
| 1,82% | FORD MOTOR CO |
XCV – Ishares Canadian Value Index
XCV seeks long-term capital growth by replicating the performance of the Dow Jones Canada Select Value Index, net of expenses. XCV provides exposure to large and mid-sized Canadian companies that are believed to be undervalued by the market relative to comparable companies
| Name | Weight (%) |
| TORONTO DOMINION | 10,27 |
| ROYAL BANK OF CANADA | 9,98 |
| BANK OF NOVA SCOTIA | 9,58 |
| BANK OF MONTREAL | 7,97 |
| CANADIAN IMPERIAL BANK OF COMMERCE | 6,06 |
| BARRICK GOLD CORP | 5,28 |
| MANULIFE FINANCIAL CORP | 5,18 |
| CANADIAN NATURAL RESOURCES LTD | 5,04 |
| SUNCOR ENERGY INC | 4,38 |
| NUTRIEN LTD | 4,26 |
VLUE – iShares MSCI USA Value Factor ETF
This is an American ETF listed in the United States. This is by far the most popular value style ETF. Its management fee is very low at only 0.15%. As indicated, the fund invests in undervalued companies. These companies can be medium or large caps.
Portfolio as of May 14
| Name | Weight (%) |
| AT&T INC | 6.88 |
| INTEL CORPORATION CORP | 6.75 |
| MICRON TECHNOLOGY INC | 3.58 |
| GENERAL MOTORS | 3.45 |
| INTERNATIONAL BUSINESS MACHINES CO | 3.07 |
| CITIGROUP INC | 2.36 |
| CISCO SYSTEMS INC | 2.12 |
| TARGET CORP | 2.11 |
| APPLIED MATERIAL INC | 1.87 |
| FORD MOTOR CO | 1.82 |
MDYV – SPDR S&P 400 Mid Cap Value ETF
The fund invests in equities with the strongest value characteristics based on: the book value / price ratio; benefit / price ratio; and sales / price ratio.
Portfolio as of May 14
| Name | Weight |
| Steel Dynamics Inc. | 1.00% |
| Owens Corning | 0.87% |
| East West Bancorp Inc. | 0.87% |
| Reliance Steel & Aluminum Co. | 0.85% |
| First Horizon Corporation | 0.83% |
| Jones Lang LaSalle Incorporated | 0.80% |
| Lear Corporation | 0.80% |
| Alleghany Corporation | 0.78% |
| AECOM | 0.77% |
| Kohl’s Corporation | 0.76% |
Disclaimer
The data on this website is for your information only. It does not constitute investment advice, or advice on tax or legal matters. Any information provided on this website does not constitute investment advice or investment recommendation nor does it constitute an offer to buy or sell or a solicitation of an offer to buy or sell shares or units in any of the investment funds or other financial instruments described on this website. Should you have any doubts about the meaning of the information provided herein, please contact your financial advisor or any other independent professional advisor.
