New Value Line ETF Attempts to Replicate Newsletter Success (FVL, PIV)

Includes: FVL, SPHQ
by: Eddy Elfenbein

Eddy Elfenbein submits: For many years, the Value Line stock rating system has consistently beaten the stock market. Critics, however, have said that the system is hard to translate into real world investing. They note that the Value Line mutual funds have not been able to match the returns of the newsletter. Plus, the mutual funds haven’t always followed the advice of the newsletter.

Value Line answered with a closed-end mutual fund (ticker: FVL), which matches the newsletter exactly. But the problem with a closed-end fund is that it can trade at a discount to its net asset value, so shareholders haven’t gotten the same return.

Now Value Line has issued its very own exchange traded fund, PowerShares Value Line Timeliness Select Portfolio (ticker: PIV). The growth of ETFs over the past few years has been quite remarkable. It will be interesting to see if Value Line can finally show if what it can do on paper can be done in the real world.