Best Value ETFs Right Now

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Contributor, Benzinga
May 26, 2020

Want to jump straight to the best ETF broker? Check out Interactive Brokers.

Are you familiar with the thrill of finding undervalued, affordable stocks with the potential of a considerable payoff? Value exchange-traded funds (ETFs) can save you plenty of time and money.

Value ETFs hold assets in a basket of companies with low price-to-earnings (P/E) ratios and a proven track record of stable price movements. These ETFs can provide your stock portfolio with low-risk investments that provide sustainable long-term gains.    

Value ETFs Biggest Gainers and Losers

Take a look at value ETFs with the most profits and losses. 

Premarket Value ETFs

Here’s a glimpse of the stock quotes of value ETFs before trading sessions are open on major stock exchanges. 

Aftermarket Value ETFs

You can trade value ETFs at these price points after trading sessions are closed on the stock exchange. 

Why Invest in Value ETFs?

Here are 3 top reasons you should consider investing in value ETFs.

  • Value ETFs have low expense ratios. The cost can play an integral role in your decision to invest. Value ETFs are designed to attract investors who want to earn more profits for a lower price. These ETFs are passively managed and an expense ratio is the annual cost of operations. 

A low expense ratio of 0.1% means that you’ll shell out $10 for every $10,000 you invest. For instance, you can purchase shares of Vanguard Energy ETF (NYSEARCA: VDE) at a low expense ratio of 0.10% — $100. With value ETFs, you have the option of buying cheaper stocks such as Fidelity MSCI Energy Index ETF (NYSEARCA: FENY) at a lower expense ratio — 0.08% — or $80. 

  • Value ETFs can deliver more gains in the long run. Along with the low cost of shares, value ETFs can offer a financially stable return on your investment. These ETFs can bring considerable profits to your portfolio if you decide to buy and hold shares. A diverse portfolio of small, mid- and mega-cap stocks to be included in your bundle of value ETFs. This diverse set of holdings offset the risk of volatility in the long run. 
  • Value ETFs have good dividend yields. Most value ETFs offer dividends to shareholders on a monthly or quarterly basis. Taking the time to invest in these ETFs can become a second source of income for you. Combined with the security of long-term returns, these ETFs can help you plan your retirement and even cover your regular expenses without requiring you to dig into your savings. 

3 Value ETFs by AUM

Whether you’re a beginner or an experienced trader, value ETFs bring something to the table for every kind of investor. From low-cost shares to instant diversification, value ETFs can reduce the risk of losses and improve your earnings over time.

You should evaluate key factors such as expense ratios, price-to-earnings (P/E) ratios, index performance, historical return records, liquidity and assets under management (AUM) before you invest. Taking these criteria into consideration, you can check out these value ETFs to invest in.  

1. Utilities Select Sector SPDR Fund (NYSEARCA: XLU)

Launched in 1998, Utilities Select Sector SPDR Fund tracks the Utilities Select Sector Index. It exposes you to domestic stocks from the U.S. utility sector known for low volatility and high dividend yields. 

Utilities Select Sector SPDR Fund has an expense ratio of 0.13% and a P/E ratio of 19.58. With this ETF investment, you can earn an annual dividend yield of 3.42%. Utilities Select Sector SPDR Fund has a 3-year return of 19.52% and a 5-year return of 49.49%. It has a total AUM of over $11 billion with an average monthly trade volume of 17 million shares. 

Historical performance of Utilities Select Sector SPDR Fund over the last 5 years.
Source: NASDAQ

2. Vanguard Utilities ETF (NYSEARCA: VPU)  

Vanguard Utilities ETF holds assets in more than 50 companies from the U.S. utility sector. It mirrors the MSCI US Investable Market Utilities 25/50 Index and has a low expense ratio of 0.10%. 

This Value ETF has a 3-year return of 18.94% and a 5-year return of 49.72%. You can earn an annual dividend yield of 3.16% by investing in this ETF. It has a P/E ratio of 24.8 with a total AUM of $3.7 billion. Vanguard Utilities ETF trades more than 200,000 shares per month. 

Historical performance of Vanguard Utilities ETF over the last 5 years. 
Source: NASDAQ

3. ProShares Ultra Utilities ETF (NYSEARCA: UPW)

ProShares Ultra Utilities ETF has been on the market since 2007. It corresponds to the Dow Jones U.S. Utilities Index at a 200% return. 

The ETF stock has low liquidity with less than 5,000 shares traded every month. It has an expense ratio of 0.95% and a total AUM of $13.6 million. ProShares Ultra Utilities ETF has an annual dividend yield of 1.73% and a P/E ratio of 17.84. It has a 3-year return of 6.9% and a 5-year return of 56.63%.

Historical performance of ProShares Ultra Utilities ETF over the last 5 years. 
Source: NASDAQ 

Best Online Brokers for Value ETFs

You can browse through thousands of top ETFs on the stock exchange with an online broker. Most online brokers let you trade ETFs commission-free. Benzinga’s picked the best online brokers to help you get started.  

TradeStation
Best For
  • Futures Trading
securely through TradeStation's website

1. TradeStation

You can experience the full suite of intuitive trading technology, online brokerage services and trading education with TradeStation.

This platform lets you explore broad markets to trade stocks, ETFs, futures, options or crypto with competitive pricing models. 

At TradeStation, you can start investing with advanced trading tools and data to help you in your trading strategy.

You can also share your knowledge with a thriving community as you unlock new trading skills.  

Firstrade
Best For
  • Mobile Investing
securely through Firstrade's website

2. Firstrade

Firstrade’s Android and iPhone apps let you seize every opportunity to trade no matter where you are. Get access to trading trends and tactics from comprehensive research and reports provided by Morningstar, Briefing.com, Zacks and Benzinga. 

This online trading platform is completely customizable and lets you manage your account seamlessly across your digital devices.

Firstrade comes equipped with an advanced screener that lets you filter stocks based on P/E ratios, profitability, market capitalization, industrial sectors and more. 

TD Ameritrade
Best For
  • Options Trading
securely through TD Ameritrade's website

3. TD Ameritrade

TD Ameritrade is an online broker that helps you build and manage your financial portfolio. Its more than 40 years of industry-leading experience can help you successfully trade stocks, ETFs, options, futures, mutual funds, forex and bonds on its platform. 

TD Ameritrade lets you access your trading account on web and mobile. It comes integrated with the thinkorswim platform that features elite-level trading tools to perform stock analyses and test investment strategies. You can also catch the latest financial news from Yahoo! Finance in a customizable dock on TD Ameritrade.  

Are Value ETFs Right for Your Portfolio?

Value ETFs can make you a shareholder of several promising stocks with a marginal fee. Their potential for long-term gains coupled with stable performance in the stock market can make value ETFs a lucrative investment opportunity for you.