MGV - MGV: A Low-Cost Value Fund With Consistent Downside Protection
2024-06-04 00:15:26 ET
Summary
- MGV is a low-cost value fund that selects mega-cap stocks based on five ratios: book-to-price, future earnings-to-price, historical earnings-to-price, dividends to price, and sales-to-price.
- It shares many similarities with the Vanguard Value ETF, including a low five-year beta and nearly identical valuation ratios. Naturally, it's slightly more concentrated, but the quality is higher.
- MGV has demonstrated solid downside protection over the last decade. However, FVAL is another low-cost value ETF I want readers to consider.
- On a sector-adjusted basis, FVAL's value, growth, and quality features are better than MGV's despite allocating 28% to Technology stocks, and it should outperform MGV except in a strong value rotation.
- I like this "compromise" solution, and as a result, have assigned only a "hold" rating to MGV.