The overlooked Deep Value ETF (DVP – Free Report), which carries an unfavorable Zacks ETF Rank #5 (Strong Sell) with a High-risk outlook, emerged as the best-performing ETF of November. It gained 11.6%.
Most of the gains came in the first half as concerns over the delay in implementation of corporate tax cuts and the sell-off in high yield bonds made investors jittery, triggering the demand for value stocks. Additionally, the recent technology rout and North Korea new missile tests led to a further increase in demand.
Honing in on value securities ensures a safety net for investors as it includes stocks with strong fundamentals – earnings, dividends, book value and cash flow – that trade below their intrinsic value and are undervalued by the market, In fact, value stocks have the potential to deliver higher returns and exhibit lower volatility compared with growth and blend counterparts.
Let’s take a closer look at the fundamentals of DVP.
DVP in Focus
This ETF offers exposure to undervalued dividend paying stocks in the S&P 500 with solid balance sheets, earnings, and strong free cash flow. It tracks the performance of the TWM Deep Value Index, charging investors 80 bps in annual fees. The product is home to 20 stocks with none accounting for more than 8.1% of the assets. It has amassed $104.3 million in its asset base and trades in a meager volume of 6,000 shares a day.
DVP is a large cap centric fund, which tend to be the most stable in an adverse economic scenario while at the same time offer capital appreciation in a booming market.
Though most of the stocks in the fund’s portfolio delivered strong returns, a few were the real stars. Below we have highlighted those five best-performing stocks in the ETF with their respective positions in the fund’s basket:
Best Performing Stocks of DVP
Foot Locker (FL – Free Report): The stock surged about 46% in October. It carries a Zacks Rank #3 (Hold) and has a VGM Score of A. It saw solid earnings estimate revision of 11 cents this month for the fiscal year and has a solid Industry Rank in the top 40%. Foot Locker occupies the ninth spot in the fund’s basket with a 4.8% share.
