πππThe US stock markets continued their wobbly start in September with the indexes posting steep weekly losses. Nasdaq Composite fell 5.8% on the week, its worst performance since January 2022. The S&P500 fell 4.2% and the Dow Jones Industrial Average was 2.9% lower.
In the midst of this volatility, $SPDR Portfolio S&P 500 Value ETF(SPYV)$ was not as badly affected. SPYV fell 0.9% on Friday and has dropped 2% in the past 5 days. However it is still up 9.1% year todate and in 2023, SPYV has risen 18%.
SPYV ETF 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 consists of stocks that exhibit the strongest value characteristics based on book value to price ratio, earnings to price ratio and sales to price ratio.
The Top 10 holdings include $Berkshire Hathaway(BRK.B)$
The Top 10 holdings weightage is 19%. Total number of holdings is 438. The expense ratio is 0.04%, one of the lowest among similar competing ETFs. Dividends are paid every 3 months. SPYV goes ex dividend on September 23. The current dividend yield is 1.86%.
Berkshire Hathaway is SPYV's Top Holding at 4% weightage. It recently reached USD 1 Trillion in market capitalisation on August 28 just in time for Warren Buffett's birthday on August 30. Warren Buffett is in my opinion the Father of Value Investing.
Berkshire's holding in cash and cash equivalent has reached a record USD 276.9 billion at the end of June amid a recent selling spree of $Apple(AAPL)$
Buffett watchers say that Berkshire's recent stock sales could be due to Warren Buffett's thinking that the stock market is overpriced and suggests that he may be thinking to set himself up to take advantage of a downturn.
JP Morgan Chase is the largest US bank with total assets of USD 3.503 trillion. It operates 4912 domestic branches and 32 foreign branches.
JP Morgan delivered a 20% total return for investors in the first half of 2024. This is due to a combination of strong business performance and improving investor sentiments towards the banking industry.
Exxon Mobil is the largest US oil and gas company. As at June 30 2024, Exxon Mobil has a market cap of USD 497.62 billion. It is active in all areas of the supply chain, from hydrocarbon extraction to retailing of gasoline.
In August, Exxon Mobil posted its 2nd highest results for the 2nd quarter in the past decade as it achieved record production in Guyana and the Permian Basin.
Exxon posted net income of USD 9.2 billion or USD 2.14 per share, a 17% increase over profits of USD 7.9 billion or USD 1.94 per share in the previous year quarter. Exxon's acquisition of Pioneer Natural, which closed in May 2024, contributed USD 500 million to Exxon's earnings.
Exxon also posted revenue of USD 93.06 billion from USD 82.91 billion a year ago, beating analysts' estimates of USD 90.99 billion.
Exxon share price is up 10% year todate.
Johnson & Johnson is a US pharmaceutical, biotechnology, and medical technologies conglomerate. In July this year, it has spin off its shares in Kenvue which was formerly known as Johnson & Johnson's Consumer Health Business. It is a strategic move by Johnson & Johnson aimed at making both companies more agile.
Johnson & Johnson has an impressive record of 63 consecutive years of dividend growth, earning the title of Dividend King.
United Health is US's largest private health insurer and the largest employer of doctors. It also helps to run hospitals, has rapidly acquired outpatient surgery centers and is expanding into home health services.
Millions of Americans regularly interact with one or several of the company's 2,200 subsidiaries. United Health says that its acquisitions have helped it deliver a value based healthcare with providers working together to achieve a shared goal of high quality, low cost health care.
These are just 5 of the top 10 holdings in SPYV. Performance wise SPYV is up 9% year todate and in 2023 it has risen 19%. But if you look back 5 years ago, SPYV is up 61%. Since its inception in September 25 2000, SPYV has jumped 210%.
I have invested in SPYV since 2021 and it has grown slow and steadily in that time. I like its low cost entry point when I first started investing in SPYV and the nice, regular dividends it pays every 3 months.
SPYV also does the heavy lifting for me by choosing the best value stocks and weeding out the non performing ones. With 438 stocks SPYV is certainly well diversified and minimises my risk in investing in individual stocks.
Just like Warren Buffett, price is what we pay but value us what we seek when we invest in stocks and SPYV ETF gives me the best value stocks all nicely packaged into one awesome ETF.
When the markets are volatile like this week, SPYV gives me a sense of a stability and calm. That is why I invest in SPYV.
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