ETF Insights

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"I like the idea of investing in undervalued stocks, but am concerned about quality." 


Strategies based on the “value” factor focus on companies whose stock price seems low when judged by important company fundamentals – for example price-to-book ratio, price-to-earnings ratio, price-to-sales ratio or similar metrics. Numerous studies have shown that value stocks tend to outperform their peers, a reflection of the fact that investors take on additional risk through investing in cheap stocks.* Value stocks are particularly sought-after in periods when market valuations are distorted.

*Finding Value: Understanding Factor Investing, MSCI. July 2015.