LSV Disciplined Value ETF (LSVD) seeks to provide long-term capital appreciation by investing in undervalued U.S. stocks selected using LSV Asset Management's quantitative value methodology. This actively managed equity ETF targets companies trading below their intrinsic value based on fundamental metrics like price-to-book, price-to-earnings, and price-to-cash-flow ratios.
How It Works
LSVD employs LSV's proprietary quantitative model that screens the U.S. equity universe for stocks exhibiting classic value characteristics including low price multiples, strong balance sheets, and positive earnings momentum. The fund uses fundamental analysis combined with systematic risk controls to construct a concentrated portfolio of 50-100 holdings. Portfolio managers actively adjust weightings based on valuation changes and rebalance quarterly to maintain disciplined exposure to the most attractive value opportunities.
Key Features
- Managed by LSV Asset Management, a respected institutional value manager with decades of quantitative investing experience and strong long-term performance
- Zero expense ratio launch offering provides cost-effective access to professional active value management typically reserved for institutional investors
- Recently launched in December 2024, representing fresh approach to value investing without legacy performance drag from previous market cycles
Risks
- This ETF can lose value if value investing falls out of favor, as it has underperformed growth strategies for extended periods like 2010-2020
- Concentrated portfolio of 50-100 stocks creates higher single-name risk compared to broad market ETFs, potentially amplifying losses from individual stock disappointments
- Value stocks can decline 40-50% during market downturns and may take years to recover, requiring patience through extended underperformance periods
Who Should Own This
Best suited for patient investors with 5+ year time horizons seeking active value exposure as a satellite holding (10-25% of equity allocation). Requires high risk tolerance for potential multi-year underperformance and strong conviction in value investing principles. Ideal for investors wanting professional active management at low cost who believe current market conditions favor value stocks.