The Simple Way to Buy Value Stocks

Published: Nov. 2, 2016, 7:01 p.m.

Welcome to Episode #16 of the Value Investor Podcast Every week, Zacks value stock strategist and the Editor of Zacks Value Investor portfolio service, Tracey Ryniec, talks about all things happening in the value stock universe, including her top stock picks. After recently having a regional bank stock blow-up in her Value Investor portfolio, Tracey was too aware of the risks of buying individual stocks. But if even a value investor can get burned buying stocks, how do you lessen the risk? One way to do that, and still be in the value stock game, is by buying value stock ETFs. Historically, the value stock indexes have outperformed the regular stock indexes. Value has even done better than growth. In the last 2 years, however, value has underperformed. That means there is a buying opportunity now. Tracey believes you should have more than one ETF in a portfolio. While she likes small cap value, and invests herself in that sector, investors shouldn’t forget about the mid-caps. The large caps can also be a good way to lessen your portfolio volatility. Here are Tracey’s favorite value ETFs: 1. Vanguard Small Cap Value ETF (VBR): Tracey owns this ETF. She likes its low expense ratio and that its largest sector holdings is in financials. 2. Guggenheim S&P Small Cap 600 Pure Value ETF (RZV): This ETF only owns 150 “pure” value stocks. 3. Vanguard Mid-Cap Value ETF (VOE): It holds 210 companies and tracks the CRSP US midcap value index. 4. iShares S&P Mid Cap 400 Value ETF (IJJ): Industrials are the largest sector and real estate is in the top five. 5. Vanguard Large Cap ETF (VV): Holds 610 mostly domestic US companies. It yields 2%. ETFs may seem like a boring way to invest, but for value investors, it can be a great way to get value exposure while lowering the risk of owning individual stocks. Find out what else Tracey likes about value ETFs in this week’s podcast. Vanguard Small Cap Value ETF: https://www.zacks.com/funds/etf/VBR/profile?cid=cs-soundcloud-ft-pod Guggenheim S&P Small Cap 600 Pure Value ETF: https://www.zacks.com/funds/etf/RZV/profile?cid=cs-soundcloud-ft-pod Vanguard Mid_Cap Value ETF: https://www.zacks.com/funds/etf/VOE/profile?cid=cs-soundcloud-ft-pod iShares S&P Mid Cap 400 Value ETF: https://www.zacks.com/funds/etf/IJJ/profile?cid=cs-soundcloud-ft-pod Vanugard Large Cap ETF: https://www.zacks.com/funds/etf/VV/profile?cid=cs-soundcloud-ft-pod Follow us on StockTwits: stocktwits.com/ZacksResearch Follow us on Twitter: twitter.com/ZacksResearch Like us on Facebook: www.facebook.com/ZacksInvestmentResearch