Many market watchers have talked quite a bit about growth investing, but value has fallen by the wayside. Despite many opportunities for value to show its qualities, growthier investments have carried the day, especially in the world of tech. Moving forward, an active value ETF approach could help value stand out. The Natixis Vaughan Nelson Select ETF (VNSE ) has done well over the last three years and could appeal.
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According to Natixis Investment Managers data, the active value ETF has returned 8.8% on a three-year NAV basis. VNSE has also returned 14.9% since its launch. Over the last three years, per the ETF Database, VNSE’s ETF Database Category and FactDet Segment averages have returned 1.8% and 1.1%, respectively. That compares well to VNSE’s level of returns.
An Active Value ETF to Consider
The ETF charges 80 basis points for its active approach. It launched in 2020 and seeks U.S. large- and midcap stocks believed to be out of favor. The active value ETF looks for those stocks selling at a relatively low value measured by discounted cash flow models. Together, that leads to about 20 to 40 large- and midcap firms in the ETF’s portfolio.
Given the higher-for-longer rate regime investors face and the potential for rate cuts, a value view could help. Should rate cuts arrive late this year and into next year, those underappreciated firms could be poised to benefit. What’s more, an active value ETF like VNSE could help offset a growthier portfolio, especially given the concentration risk many investors are facing.
While value has yet to arrive, as many headlines have suggested it might, VNSE’s performance makes the case for it to be a part of a long-term portfolio. For investors looking at active ETF options, VNSE may be worth a closer look.
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