IVLU: A Little Too Much Japan

seekingalpha06-07

We Are It’s been a U.S.-only investment world for well over a decade. International stocks have badly underperformed, and global diversification, frankly, has been a costly free lunch. But cycles come...

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International stocks have badly underperformed, and global diversification, frankly, has been a costly free lunch. But cycles come...</p>\n\n<a href=\"https://seekingalpha.com/article/4697810-ivlu-a-little-too-much-japan\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"FDN","symbol_name":"First Trust Dow Jones Internet I","start_time":0,"source_url":"https://seekingalpha.com/article/4697810-ivlu-a-little-too-much-japan","article_id":"2441427747","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1474796041/image_1474796041.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2441427747","pubTimestamp":1717690123,"columns":[],"sourceInfo":{"source_id":"seekingalpha_fund","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"iShares Edge MSCI Intl Value Factor ETF provides access to a portfolio of international value stocks that might capture the so-called value premium — the tendency of value stocks over the long term to outperform. Diversifying your portfolio with IVLU also might help by red","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"FDN":"First Trust Dow Jones Internet I","BK4585":"ETF&股票定投概念","BK4588":"碎股","BK4550":"红杉资本持仓","EFV":"EAFE价值股ETF-iShares","IVLU":"iShares MSCI Intl Value Factor ETF"},"translate_title":"IVLU：日本有点太多了","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"EFV":1,"IVLU":1,"FDN":0.9},"content_text":"We Are It’s been a U.S.-only investment world for well over a decade. International stocks have badly underperformed, and global diversification, frankly, has been a costly free lunch. But cycles come and go. Leaders become laggards. And at some point, international investing I think will have a multi-year cycle of favorable momentum. If you agree and are bullish on that cycle being near, you may want to consider the iShares Edge MSCI Intl Value Factor ETF (NYSEARCA:IVLU). This ETF is designed to track the return of the MSCI World ex USA Enhanced Value Index, providing exposure to large- and mid-capitalization equities in developed international markets. Launched in June 2015, this ETF has amassed more than $1.8 billion under management as investors seek a low-cost way (just 0.3% expense ratio) to play the global value-investing game. A Look At The Holdings  This is a fairly well diversified fund, with over 350 holdings, and with no position making up more than 2.16% of the fund.   ishares.com It’s worth noting that most value-tilted portfolios, whether US or international, tend to have diversification like this as there are less tech companies classified as value which have the “winner take all” effect that causes those companies to be such outsized allocations in market-cap weighted core or growth portfolios. When we look at the country allocation, Japan makes up nearly 1/3rd. Keep that in mind as Japan could be in a currency crisis with the Yen and that might result in disruptions to their markets (and others).   ishares.com Sector Composition When you have numerous holdings in a portfolio, the sector composition is what really matters most. This can tell you a lot about the real risks the fund is attached to. No surprises here. Value, again whether it’s U.S. or international, tilts towards Financials, Industrials and Health Care. Those are precisely the top 3 heaviest sectors in the ETF.   ishares.com Note that Tech makes up less than 10% of the portfolio. The value style has underperformed growth precisely because of this. If you’re betting on value, you’re betting against Tech to some extent as the biggest driver of returns. That, by the way, also means you’re betting on international (core included) over U.S. because most U.S. core averages are extremely tied to the performance of the Tech sector. Peer Comparison The fund’s closest competitor in the market today is the iShares MSCI EAFE Value ETF (EFV), which tracks the MSCI EAFE Value Index of value stocks in developed markets outside the United States. When we look at the price ratio of IVLU to EFV, we find that IVLU has outperformed solidly over the past few years.   stockcharts.com Pros and Cons On the positive side? iShares Edge MSCI Intl Value Factor ETF provides access to a portfolio of international value stocks that might capture the so-called value premium — the tendency of value stocks over the long term to outperform. Diversifying your portfolio with IVLU also might help by reducing risks related to overexposure to your home country’s market. In general, I favor value over growth. Value has been ignored for years and lagged badly, while international stocks have not been good places to allocate to overall. One of these dynamics, if not both, are due to change, and this fund provides access to that potential reversal of relative performance. The negative? I worry about Japan being such a large allocation here. Yes, the country has performed well, but the more their currency depreciates, the more challenged that country’s economy might become due to Oil priced in Yen as the 5th largest consumer of energy in the world. I’d prefer a more even country allocation overall. Japan might be fine long-term, but I just don't think you want too much exposure there right here right now. Conclusion  Other than my concerns around Japan, I still think this is a good fund overall and provides important diversification benefits (which as noted earlier has been a costly free lunch). I do think this looks interesting though at this point in the cycle and think the IVLU is worth considering against the U.S. and growth.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2441427747"}