ETFs have exploded in popularity over the last several years, but it’s fair for investors and advisors to want to look out for those funds with a few years under their belts themselves. Hitting the three-year ETF milestone means more than accumulating a record with which advisors and investors can judge a strategy. It also unlocks access to whole new streams of investment, potentially a strong boost for the (FLV ), which just hit its own three-year mark.
FLV launched right at the start of the pandemic in March 2020, and just hit its third birthday on March 31 this year. FLV is non-transparent, actively investing in those large-caps that the fund’s managers believe are undervalued. Despite its lack of transparency, it does occasionally update its public information surrounding its holdings. According to VettaFi, its largest weight at last reporting was towards Johnson & Johnson (JNJ) at 5.6%.
See more: American Century’s KORP, VALQ Hit 5-Year ETF Mark
Its active investment approach may also stand out as active ETFs have really come into their own this year, both at American Century and in the overall ETF landscape.
In looking to identify those firms that may be undervalued by the market in their stock price, FLV’s managers look to 30–50 names total to include in the ETF’s holdings. FLV considers fundamentals while also adding an ESG consideration, though not a full screen, to its approach.
That’s helped the strategy bring some real momentum as it hits its three-year ETF milestone. FLV has outperformed its ETF Database category average and its FactSet segment average over the last month, returning 2.1% compared to negative returns for both averages. At the same time, its AUM has grown by about $8 million over the last month due to both price influence and fund flows, per VettaFi.
Its focus on unloved large-caps may have paid off in other ways, too, offering notable dividend yields — FLV has an annual dividend yield of nearly 5% and an annual dividend rate of $2.92, nearly double the ETF Database category average and more than double the FactSet average.
Taken together, the 42 basis point fee ETF has taken some solid momentum into its new era. Sitting at $230 million in AUM, it’s gathered plenty of assets in its three years of operation, and with market uncertainty on the rise as investors await a looming recession, it could be worth considering a large-cap value strategy with an active bent.
For more news, information, and analysis, visit the Core Strategies Channel.