πππLast week ended on a dour note as US stocks slumped on Friday as businesses around the world scrambled to contain the effects of a disruptive technology outage. All 3 US indexes fell. The Magnificent 7 were not spared. In volatile times like now, $SPDR Portfolio S&P 500 Value ETF(SPYV)$ is a good tactical bet as it is a low cost ETF that seeks to offer exposure to S&P500 companies that could be undervalued relative to the broader market.
SPYV tracks the S&P500 Value Index which contains stocks that show the strongest value characteristics based in Book Value to Price ratio, Earnings to Price Ratio and Sales to Price Ratio.
The Top 10 holdings include $Berkshire Hathaway(BRK.B)$ , $JPMorgan Chase(JPM)$
The Top 10 holdings weightage is 19.6%. Total number of holdings is 438. The expense ratio is a low 0.04%. Distributions are paid every 3 months. The current distribution yield is 2.17%.
Berkshire Hathaway is Warren Buffett's company. It recently reached an all time high of USD 445.61 in July 17 2024. Berkshire owns a large stock portfolio led by $Apple(AAPL)$
This has resulted in Berkshire Hathaway' s market capitalisation jumping to USD 934.42 billion. Berkshire could be the next company to join the Trillion Dollar Club.
JP Morgan is America 's largest bank. It recently reported its Q2 24 earnings with profit rising 25%, buoyed by rising investment banking fees and an USD 8 billion dollar gain from a share exchange deal with Visa. JPMorgan also beats estimates for Q2 profit as a resurgence in deal making and strong capital markets fueled record results.
Bank of America is the 2nd largest US Bank. It recently reported its Q2 24 earnings that topped analysts expectations. It reported Q2 Earnings of 83 cents per share versus expectations of 80 cents per share. Bank of America posted revenues, net of interest expense of USD 25. 4 billion, up by 1% year over year and above analysts'estimate of USD 25.22 million.
Exxon Mobil and Chevron are the 2 largest oil companies in the US. If Donald Trump wins the Election, they will benefit as he wanted to increase oil production in the US.
Johnson & Johnson, Walmart, Proctor & Gamble are Dividend Kings, having paid in increasing dividends over the last 50 years.
United Health is the top holding in the Dow Jones Index. At USD 550 per share, it recently pushed the index to a new record closing. United Health is the largest US health insurer and it recently announced excellent Q2 24 earnings which caused the stock to jump 6.5%.
President Biden has just announced that he will not be running for the US Presidential Election on Sunday. He has nominated Kamala Harris, his current Vice President to run instead.
VIX, the volatility index or Fear Index has climbed 27% last week. So I believe that the markets will be volatile this week.
Performance wise SPYV has only dropped 0.5% on Friday and in the past 5 days it is only 0.4% down. SPYV is now up 6.9% year todate and in 2023, it has risen 13%. But if we look further back further, since 5 years ago SPYV has risen 58% and 204% since its inception in September 2000.
I like SPYV as it does the heavy lifting for me by selecting the best value stocks and minimising my risk during periods of volatility like now. SPYV is a slow and steady kind of ETF that will provide me with steady dividends while waiting for capital growth.
Investing does not have to be complicated. With patience and time in the market, SPYV will simply grow slow and steady. That is my favourite way of investing!
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