Seeking Alpha
Deep value, event-driven, dividend investing, REITs
Profile| Send Message|
( followers)  

Many investors and potential investors have asked me how I determine the value of a specific company's stock. When it comes to ETFs there are few things I consider, but one of the most important things to look at in my opinion, is the fee the fund charges potential investors when they are considering establishing a position.

Vanguard Short-Term Bond ETF (NYSEARCA:BSV): BSV, which trades in a 52-week range of $80.59 (52-week low) and $81.94 (52-week high), yields an estimated 1.67% ($1.36), making the stock an affordable option considering its dividend. Shares have been pretty flat during the last few trading sessions and could continue to demonstrate similar behavior through the second half of the year. One the key catalysts for potential investors would be the expense ratio when compared to that of its peers. Currently, BSV charges investors an annualized expense ratio of 0.11%, when compared to the category average of 0.18%. That difference equates to an estimated savings of 39% annually.

iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEARCA:LQD): LQD, which trades in a 52-week range of $109.72 (52-week low) and $118.00 (52-week high), yields an estimated 4.01% ($1.36), making the stock an affordable option considering its dividend. Shares have been pretty flat during the last few trading sessions and could continue to demonstrate similar behavior throughout the second half of the year. One the key catalysts for potential investors would be the expense ratio when compared to that of its peers. Currently, LQD charges investors an annualized expense ratio of 0.15%, when compared to the category average of 0.22%. That difference equates to an estimated savings of 30% annually.

SPDR Barclays Capital High Yield Bond ETF (NYSEARCA:JNK): JNK, which trades in a 52-week range of $34.09 (52-week low) and $40.46 (52-week high), yields an estimated 7.1% ($2.83), making the stock an affordable option considering its dividend. Shares have been about 1% over last few trading sessions and could continue to demonstrate similar behavior through the second half of the year. One the key catalysts for potential investors would be the expense ratio when compared to that of its peers. Currently, JNK charges investors an annualized expense ratio of 0.41%, when compared to the category average of 0.47%. That difference equates to an estimated savings of 12% annually.

Expense ratios shouldn't be the only thing potential investors should consider when it comes to ETF investing. Variables such a returns and dividend yield also play factors when screening potential investments. In the case of these three specific ETFs, I'd begin with a small to moderate sized position and add to that position as dividend dates approach.

Source: 3 Bond ETFs I Consider To Be Cheap Based On Comparable Expense Ratios