SPDR S&P 1500 Value Tilt ETF

VLU

Market cap $524M

SPDR S&P 1500 Value Tilt ETF (VLU) offers diversified large-cap value exposure, focusing on financials and technology. VLU has underperformed the benchmark like most value ETFs, but it may not represent its long-term potential. VLU has performed very well compared to competitors and shows compelling dividend growth despite its low yield.

Value ETFs witness a surge as tech falters, with SPVU, RPV, RZV, RFV and GVLU gaining on rate cut bets and rotation into defensive sectors.

Vanguard projects US value stocks to outperform growth over the next decade, making a value tilt strategy timely for investors. The SPDR S&P 1500 Value Tilt ETF (VLU) offers diversified exposure, strong historical returns, and a low expense ratio of 0.12%. VLU's stock selection methodology delivers competitive growth characteristics and has outperformed or matched major indices, including SPY, when dividends are included.

SPDR S&P 1500 Value Tilt ETF invests in over 1,400 U.S. stocks with lower valuations, offering a unique value strategy with a 0.12% expense ratio. VLU's portfolio is weighted by valuation metrics, resulting in higher exposure to technology stocks and lower exposure to defensive sectors compared to traditional value funds. VLU has outperformed the S&P 1500 Pure Value ETF over the past decade, delivering a total return of 187.1% versus RPV's 115.9%.

The SPDR S&P 1500 Value Tilt ETF aims to track low-valuation stocks within the S&P 1500 but has underperformed peers with lower fees. VLU's portfolio has a lower weighting in technology and higher in financials and consumer staples, yet it shows marginal differences from the S&P 1500. I recommend the SPDR Portfolio S&P 1500 Composite Stock Market ETF for better returns and lower fees when seeking total U.S. market index exposure.

The iShares Russell Top 200 Value ETF provides exposure to large-cap U.S. equities, with targeted access to selected categories in the U.S. market. VLU takes advantage of stocks with a lower valuation and momentum, giving the fund a more gradual growth approach. An overweighted position could create near-term challenges for both IWX and VLU, including regulatory recalibration.

VLU provides cost-effective exposure to small-, mid-, and large-cap stocks and overweights those with favorable valuation ratios. Its twelve-year track record is solid, and its ER is only 0.12%. The approach still provides some exposure to mega-cap growth stocks like Apple and Nvidia, just at much lower allocations. Instead, it redirects that weight towards cheap banking, energy, and telcos. The result is a well-balanced and fundamentally strong portfolio. Its 16.23x forward P/E is competitive with most peers, but the fund may be slightly deficient in quality.