Featured Tickers:

CDL ,

DGRO ,

DIA ,

FNDB ,

FNDX ,

IUSV ,

LRGF ,

QLC ,

SCHD ,

SCHV ,

SDY ,

VLU ,

VONV ,

VTV

This month’s ETF First Cut seeks out domestic large-cap value stock exchange-traded funds that have performed well within their peer group over the last five years.

Domestic large-cap stocks are a core asset allocation segment for most investors. Value approaches have performed strongly recently, after being out of favor for a number of years.

There are 104 domestic large-cap value stock ETFs in the AAII universe of ETFs. The screen first focused on consistent performance by requiring one-, three- and five-year performance grades of C or better. Performance grades are calculated by comparing a fund’s performance relative to other funds in the same category, with an A grade indicating best performance within a category. These filters excluded funds in the lowest 40th percentile performance for the category (grades of D and F). It is generally best to first identify an ETF category desired for your asset allocation, then seek out ETFs with strong performance, acceptable risk and low expenses within the desired category.

To help eliminate ETFs taking on excessive risk to achieve their performance, we then excluded funds with a risk rank of F. The table below lists the category risk index, which relates an ETF’s volatility over the last three years to the average volatility of ETFs in the same category. ETFs with a category risk index of 1.00 had average volatility within the category.

To help take costs into consideration, the screen required that the ETF’s expense ratio be below average within the category. ETFs designated as leveraged or inverse were also excluded.

The final filters required minimum total assets of $25 million and average daily trading volume of at least 5,000 shares. In total, 14 ETFs passed all of the filters as of March 31, 2021, and they are ranked by their five-year return.

Large-Cap Value ETFs With Consistent Strong Performance
(Ranked by Five-Year Return)

Fund	Ticker	1-Yr Ann’l Ret (%)	1-Yr Ret Cat Grade	3-Yr Ann’l Ret (%)	3-Yr Ret Cat Grade	5-Yr Ann’l Ret (%)	5-Yr Ret Cat Grade	Cate- gory Risk Index	Exp Ratio (%)	Total Assets ($ Mil)	Index Tracked



Schwab US Dividend Equity	SCHD	67.7	B	18.0	A	16.3	A	0.93	0.06	21,259	DJ US Dividend 100
SPDR Dow Jones Industrial Avg	DIA	53.5	C	13.4	B	15.8	A	0.92	0.16	28,551	DJ Industrial Average
iShares Core Dividend Growth	DGRO	51.7	C	15.3	A	15.6	A	0.88	0.08	17,452	Morningstar US Div Growth
SPDR S&P 1500 Value Tilt	VLU	72.0	A	14.5	A	14.9	A	1.06	0.12	111	S&P 1500 Low Valuation Tilt
Schwab Fundamental US Large Co	FNDX	68.8	A	15.2	A	14.4	A	1.02	0.25	6,411	Russell RAFI US LC
Schwab Fundamental US Broad Mkt	FNDB	71.0	A	15.0	A	14.4	A	1.04	0.25	325	Russell RAFI US
iShares MSCI USA Multifactor	LRGF	55.6	C	11.2	C	13.0	B	0.94	0.20	981	MSCI USA Diver’d Multi-Factor
FlexShares US Quality Large Cap	QLC	54.0	C	11.4	C	12.9	B	0.94	0.32	92	Northern Trust Qual Large Cap
Vanguard Value	VTV	51.3	D	11.4	C	12.7	B	0.93	0.04	72,757	CRSP US Large Cap Value
iShares Core S&P US Value	IUSV	52.6	C	11.9	B	12.6	B	0.99	0.04	9,064	S&P 900 Value
Schwab US Large-Cap Value	SCHV	52.1	C	10.7	C	11.8	C	0.95	0.04	9,138	DJ US TSM Large Cap Value
SPDR S&P Dividend	SDY	52.2	C	12.1	B	11.8	C	0.89	0.35	18,515	S&P High Yield Div Aristcrts
VictoryShares US LgCp HiDiv Vol Wtd	CDL	60.8	B	11.0	C	11.7	C	1.02	0.35	210	NASDAQ Victory US LCHD 100
Vanguard Russell 1000 Value	VONV	55.9	C	10.9	C	11.6	C	0.98	0.08	4,304	Russell 1000 Value
Source: AAII/Morningstar. Data as of 3/31/2021. Go to https://www.aaii.com/etfs/firstcuts for a current list of ETFs meeting this criteria.