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Launched on 09/22/2014, the Deep Value ETF is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $281.81 M, this makes it one of the average sized ETFs in the Style Box - Large Cap Value. DVP is managed by Deep Value Etf. This particular fund seeks to match the performance of the TWM Deep Value Index before fees and expenses.
TWM Deep Value Index is constructed using an objective, rules-based methodology that begins with an initial universe that mirrors the companies listed on the S&P 500 Index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.80% for DVP, making it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.74%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
DVP's heaviest allocation is in the Consumer Discretionary sector, which is about 28.90% of the portfolio. Its Information Technology and Telecom round out the top three.
When you look at individual holdings, Western Digital Corp (WDC - Free Report) accounts for about 9.22% of the fund's total assets, followed by Viacom Inc New and Cvs Health Corp (CVS - Free Report) .
DVP's top 10 holdings account for about 60.58% of its total assets under management.
Performance and Risk
The ETF has added about 0.91% and is down about -12.90% so far this year and in the past one year (as of 09/06/2019), respectively. DVP has traded between $27.93 and $35.71 during this last 52-week period.
DVP has a beta of 1.17 and standard deviation of 17.90% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 21 holdings, it has more concentrated exposure than peers.
Alternatives
Deep Value ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $38.69 B in assets, Vanguard Value ETF has $48.65 B. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Deep Value ETF (DVP) a Strong ETF Right Now?
Launched on 09/22/2014, the Deep Value ETF is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $281.81 M, this makes it one of the average sized ETFs in the Style Box - Large Cap Value. DVP is managed by Deep Value Etf. This particular fund seeks to match the performance of the TWM Deep Value Index before fees and expenses.
TWM Deep Value Index is constructed using an objective, rules-based methodology that begins with an initial universe that mirrors the companies listed on the S&P 500 Index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.80% for DVP, making it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.74%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
DVP's heaviest allocation is in the Consumer Discretionary sector, which is about 28.90% of the portfolio. Its Information Technology and Telecom round out the top three.
When you look at individual holdings, Western Digital Corp (WDC - Free Report) accounts for about 9.22% of the fund's total assets, followed by Viacom Inc New and Cvs Health Corp (CVS - Free Report) .
DVP's top 10 holdings account for about 60.58% of its total assets under management.
Performance and Risk
The ETF has added about 0.91% and is down about -12.90% so far this year and in the past one year (as of 09/06/2019), respectively. DVP has traded between $27.93 and $35.71 during this last 52-week period.
DVP has a beta of 1.17 and standard deviation of 17.90% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 21 holdings, it has more concentrated exposure than peers.
Alternatives
Deep Value ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $38.69 B in assets, Vanguard Value ETF has $48.65 B. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.