Value Investing with Sven Carlin, Ph.D.

No Value ETFs Out There, Not Possible

The speaker argues that no exchange‑traded fund currently fulfills the strict criteria of a true value‑investor portfolio, which demands a margin of safety, low risk, and upside potential. He points out that the Vanguard Value Index Fund underperformed the S&P 500 both in the 2008 crisis—falling more sharply—and over the long run, delivering only 186 % growth since 2007 versus the index’s 350 %. Its top holdings—JPMorgan, Berkshire Hathaway, ExxonMobil—have all surged recently, illustrating how the fund simply rides market momentum rather than seeking undervalued securities. Citing a 1999 Forbes story, he notes that Berkshire Hathaway’s stock fell while investors chased internet stocks, yet Warren Buffett’s long‑term discipline generated outsized returns. He also references Bill Ackman’s 2015 drawdown to show how even active managers can be wiped out by investor redemptions during bad periods. The conclusion is that value investing requires independent, active analysis that cannot be encoded into a passive or even an actively managed ETF without risking catastrophic outflows. Investors should therefore rely on individual stock research or bespoke portfolios rather than seeking a “value ETF.”