The Morgan Dempsey Large Cap Value ETF (MDLV) seeks to provide long-term capital appreciation by investing in undervalued large-capitalization U.S. stocks. This value-focused equity ETF targets companies trading below their intrinsic worth based on fundamental metrics like price-to-earnings, price-to-book, and free cash flow ratios.
How It Works
MDLV employs an actively managed approach using proprietary fundamental analysis to identify undervalued large-cap stocks with strong balance sheets and sustainable business models. The fund's managers conduct bottom-up research focusing on companies with low valuation multiples, strong earnings quality, and catalysts for price appreciation. Portfolio construction emphasizes risk management through diversification across sectors while maintaining concentrated positions in the highest-conviction value opportunities, typically holding 30-50 stocks.
Key Features
- Zero expense ratio structure makes it one of the most cost-effective actively managed value ETFs available to investors
- Launched in 2023 with focus on identifying deep value opportunities in post-pandemic market environment
- Attractive 2.95% dividend yield provides income while waiting for value realization in underlying holdings
Risks
- This ETF can lose value if value investing falls out of favor, as growth stocks may continue outperforming value stocks for extended periods
- Active management risk means fund performance depends heavily on managers' stock-picking ability and could underperform passive large-cap value alternatives
- Large-cap value stocks can decline 25-35% during market downturns and may take years to recover their intrinsic values
Who Should Own This
Best suited for patient investors with 3-5+ year time horizons seeking active value exposure as a satellite holding (10-25% of equity allocation). Medium-to-high risk tolerance required given active management and value style volatility. Appeals to investors believing in fundamental analysis and willing to accept periods of underperformance while waiting for value realization.