ETF Research and Analysis
by Bradley KaySuitability
PowerShares Dynamic Large Cap Value PWV invests in the more beaten-down and potentially higher-returning half of the U.S. large-cap markets, but with a twist. This fund does not merely seek to mirror the market, but instead uses a variety of quantitative factors to select the large-value U. Read more
PowerShares Dynamic Large Cap Value PWV invests in the more beaten-down and potentially higher-returning half of the U.S. large-cap markets, but with a twist. This fund does not merely seek to mirror the market, but instead uses a variety of quantitative factors to select the large-value U. Read more
Bull Case
This ETF is very cheap for alpha-seeking funds even if it looks pricey relative to traditional passive indexes.
A low correlation with the value side of the market makes this fund a worthwhile supplement to a value-heavy portfolio.
Value stocks have traditionally provided higher returns than the market as a whole over long holding periods. Read more
Bear Case
The fairly opaque Intellidex model may not actually produce better risk-adjusted returns, in which case the higher expense ratio of this ETF will hold back returns relative to passive index funds.
The higher returns for stocks that are cheaper by measures such as price/earnings and price/book ratios are highly volatile and typically take decades to appear.
Giant-cap stocks tamp down volatility but also mean that this fund will follow the market. Investors looking for more distressed exposure and higher value premiums should look at smaller market caps. Read more
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