What is the best US Value ETF to "invest and forget" (10-15y horizon)? A few ideas and seeking help
I'm okay with having part my cash invested in market-cap-weighted ETFs, but I don't want all of it there due to concentration risks (Mag 7). I'd like to allocate a significant portion to a Value ETF that still holds tech stocks, just without them being overrepresented. Also, the expense ratio isn't my primary concern. I'm fine paying a bit more if it's genuinely the best strategy.
These are the best Value ETFs I have bumped into so far:
1. **VTV (Vanguard Value ETF; 0.04 ER):** The classic, ultra-low-cost. Theoretically, the main problem is that it lacks a profitability filter (meaning it can sometimes catch "value traps"), and its tech concentration is too low.
2. **SCHD (Schwab US Dividend Equity ETF; 0.06 ER):** Technically just a dividend ETF, but it incidentally captures the Value factor by demanding strong cash flow and high ROE. Cons: Since it generates dividends, it creates a tax drag, which might not be ideal if you just want your cash to compound over time. Plus, its tech concentration is again very low.
3. **AVLV (Avantis U.S. Large Cap Value ETF; 0,15 ER):** Uses the Fama-French methodology. I get lost in the academic theory, but the basic idea is that it evaluates the entire universe of stocks and actively targets companies with a strict combination of two factors: Value (low price relative to book/earnings) and Profitability/Quality. Its historical performance has been quite good, but it's a relatively new ETF....
4. **PRF (Invesco FTSE RAFI US 1000 ETF; 0,34 ER):** Uses the RAFI methodology. Again, I get here, but the general idea is that it weights a company based exclusively on its actual economic footprint (total sales, cash flow, dividends paid) rather than market cap. It’s the most famous ETF using this approach.
5. **FNDX (Schwab Fundamental U.S. Large Company Index ETF, 0,25 ER):** Another fundamental indexing approach, similar to RAFI but with less companies.
6. **IUS (Invesco RAFI Strategic US ETF; 0,19 ER):** Supposedly uses an evolved RAFI methodology with a stricter Quality screen and a lower expense ratio.
**Two questions here:**
1. Am I missing any other important ETF?
2. Which one would you choose for a 10-15 year horizon, and why?
**Disclaimer:** please save the "just buy VTI/VOO/VT" comments. I know those are the standard plays, but that's not the strategy I'm interested in here.