The Large-cap Value style ranks second out of the twelve fund styles as detailed in my Style Rankings for ETFs and Mutual Funds report. It gets my Neutral rating, which is based on aggregation of ratings of 41 ETFs and 772 mutual funds in the Large-cap Value style as of May 1, 2013. Prior reports on the best & worst ETFs and mutual funds in every sector and style are here.

Figures 1 and 2 show the five best and worst-rated ETFs and mutual funds in the style. Not all Large-cap Value style ETFs and mutual funds are created the same. The number of holdings varies widely (from 20 to 1,412), which creates drastically different investment implications and ratings. The best ETFs and mutual funds allocate more value to Attractive-or-better-rated stocks than the worst, which allocate too much value to Neutral-or-worse-rated stocks.

To identify the best and

Investors need to pay attention to their asset allocation if they wish to earn consistently good returns. By so doing, they decide on which categories and sub-categories of ETFs should be represented in their portfolios and, if included, to what degree. For example, if I decide on a 60% allocation to stocks, should these be half in growth-oriented ETFs and half in value-oriented ones, or, some other combination? Since there are indeed many sub-categories of ETFs, how does one choose and does it really make a difference? And once chosen, should your allocations remain fixed at these levels, or are there reasons, other than rebalancing or a change in your objectives to alter them?

Research has shown that the choice of which categories, or sub-categories, to invest in is the most important determinant of a portfolio's above par or sub-par performance. This means it is even more important than which

By The ETF Professor

With fears of a fiscal cliff running high and the chances of a Thanksgiving rally diminishing by the day, investors looking to stay involved in stocks might want to seek comfort in the largest of the large caps. Or mega caps, as stocks with market values of over $100 billion are so often called.

Indeed, mega caps have already been endorsed as an ideal with which to find shelter from the brewing fiscal cliff storm. The theory being that higher beta mid and small cap issues could languish as investor seek more conservative destinations.

There is an interesting scenario pertaining to the largest stocks. While many, if not all are household names such as Apple (AAPL), Exxon Mobil (XOM) and General Electric (GE), not all of the ETFs that focus on these types of stocks are as widely known as their underlying

E-Trade provides a selected list of ETFs for its customers. This list of ETFs are called All Star ETFs. E-Trade stated that these ETFs are selected based on criteria such as low expense ratio, tracking error, liquidity, style purity, underlying holdings, and how well the ETF represents the index it seeks to replicate. In addition, ETFs chosen are passively managed, have at least 6-months trading history and are sponsored by a well balanced investment firm. Inverse and leveraged ETFs are not considered.

The following is the list of the All Star ETFs:

Many fund investors are looking at the stock market and concerned with just one basic overriding question: What are the prospects for overall stock returns going forward? A second related question that might parallel this is: What are the prospects for growth, corporate profits, and the job market since these can be important indicators of stock prices. Of course, a third much more indirectly related question might be: What are the prospects for bonds, since bonds make up the other large asset category in competition with stocks for investors' money, and whose good performance may at times seem to be associated with poor stock performance.

In this article, however, I will present data on something that far fewer investors may have considered which could also have a major impact on their returns: Are there currently compelling reasons why, looking forward, fund investors should gravitate more to certain categories of

There are 36 “large cap value” ETFs. Per Fig­ure 1, these 36 ETFs have dras­ti­cally dif­fer­ent stock hold­ings and, there­fore, allo­ca­tions. The low­est num­ber of hold­ings is 30 while the high­est is 1178.

How do investors pick the ETF that will deliver the best performance?

Fig­ure 1: Hold­ings Count of Large Cap Value ETFs

(Click to enlarge) Sources: New Con­structs, LLC and ETFdb of Hold­ings excludes cash

As detailed in my prior arti­cle on how to find the best tech ETFs, that ques­tion was posed to the major ETF issuers at Mornigstar’s ETF con­fer­ence in Chicago a cou­ple weeks ago. The issuers admit­ted that the land­scape for ETFs is a bit clut­tered and needs attri­tion. They did not, how­ever, offer any solutions.

Like most Wall Street types, the issuers are focused on how to profit from ETFs not how to help investors profit from ETFs. Thank good­ness for

Despite the fact that corporate earnings have come through very well, the stock market is weak. As a result, the S&P 500 is cheaper than it has been for many years, in terms of price/earnings ratios. There are different methods to value stocks, but perhaps the most common method is based on the price/earnings ratio. That is the price of a given company’s shares divided by the company’s earnings. We can also look at the average P/E ratio for the S&P 500 index going back in time as this chart does:

Source: CrossingWallStreet

The blue line shows the price/earnings ratio for the S&P 500 going back to 1988. For me, there are two key pieces of information in this chart. At 12-14 or so, you can see that P/E ratios are about as low as they have been for many years. In fact, you have to go back to 1988

By Samuel Lee

Eugene Fama and Kenneth French's work popularized the value and size effects, the puzzlingly high returns that value and small-cap stocks have earned in almost every market studied. Their research has resonated with indexers, many who overweight value and small-cap stocks in their portfolios. Despite style tilting's popularity, the popular discussion is short on specific numbers. Some tilters point out that small-value stocks as defined by Fama and French have earned 14.2% annualized from 1928 to 2010, 4 percentage points above the U.S. market's return. But that doesn't mean any value index, small-cap or large-cap, will earn a similar value premium--some indexes are more size- or value-laden than others. The style map is a beautiful way to represent value and size tilts, but it doesn't quantify value and size tilts as readily observable numbers. For that, we have to go back to the size and value premiums'

This column originally appeared in Forbes

With the confidence of someone who will not be held accountable if his advice is followed, Paul Krugman, the Nobel Prize-winning economist, has been arguing in his New York Times column and blog that the Canadian- and European-led consensus at the G-20 meetings towards belt-tightening will cause another Great Depression. He invokes Keynesian theory to argue for a cookie-cutter approach to running deficits in order to avoid Herbert Hoover-style deficit reduction. To support his point, he cites Ireland and Latvia's short-term spikes in unemployment, economic swoons and high interest rates since they cut their stimulus spending.

Scary stuff. But is he right? No. Surprisingly, Krugman has completely misread Keynes, which is why President Obama and the rest of the world should ignore him, lest policymakers truly cause a Greater Depression by mortgaging away our children's futures.

John Maynard Keynes never argued that

The latest Vanguard announcement on offering all the company's 46 ETF trades commission free marks a new era for ETFs. In our opinion, with trading costs removed, ETFs are now a viable alternative to index and actively managed mutual funds in portfolio building and asset allocation.

Three brokerage firms, Vanguard, Fidelity and Schwab, have announced commission-free ETFs. Let's first compare them in the following table:

By Paul Justice

Over the past few months, some trading platforms have explicitly lowered investors' ETF costs by waiving trading commissions on a select few products. Charles Schwab (SCHW) launched eight of its own low-cost ETFs that can be traded for free on their own platform, and Fidelity recently partnered with iShares to bring 25 widely held ETFs to its users without the burden of an $8 fee per position entry or exit.

One thing is clear: Eliminating trading costs is an effective, transparent, and easy-to-quantify way to lower costs. Furthermore, over the long haul, keeping costs as low as possible--in tandem with proper asset allocation and realistic expectations--is perhaps the most effective way to meet your investment goals. In this regard, we have nothing but praise for these platform providers who are helping investors keep more of their own money.

Mutual Fund Benefits for Your ETFs?

Take the Fidelity

The reasons for the rise of the ETF industry are numerous: intraday liquidity, (potentially) superior tax efficiency, and enhanced transparency relative to traditional actively-managed mutual funds have all contributed to the billions of dollars of inflows that these funds have seen in recent years. But the real attraction for most ETF investors is the reduced expenses these products offer, often only a fraction of the fees charged by mutual funds.

But between ETFs, expense ratios can vary significantly, ranging from 0.08% (for several Schwab ETFs) to a whopping 1.50% (for the DENT actively-managed ETF). For investors looking to minimize expenses and pursue an indexing strategy in favor of active management, investing in ETFs is only the first step. In order to assist cost-conscious investors, we’ve assembled the cheapest ETF options for almost every asset class and sub-asset class.

Each of the 900-plus ETFs currently included in the ETF

A new trio of mega-cap ETFs from Barclays were launched last Friday (9/25/09), but investors failed to take notice and the first trades didn’t cross the tape until Monday. The new ETFs are all based on Russell 200 indexes, which track the largest 200 US-based companies: iShares Russell Top 200 Index Fund (IWL) (IWL overview), iShares Russell Top 200 Value Index Fund (IWX) (IWX overview), and iShares Russell Top 200 Growth Index Fund (IWY) (IWY overview).

The objective, transparent Russell methodology for slicing the market into various capitalization segments is widely respected. Other ETFs based on Russell capitalization and style categories are among the most widely traded “style-based” ETFs. We have no reason to doubt these new products will be any different.

A brief comparison of sector weightings and top stock holdings of the three new products can be found in the table

In the weeks since its sale to BlackRock was announced, the team at iShares has been busy expanding its reach, launching the first Peru-specific ETF as well as the S&P Emerging Markets Infrastructure ETF (EMIF). And the Goliath of the ETF space is showing no signs of slowing down any time soon, recently filing for approval on three new funds that would track Russell Top 200 Indexes.

iShares filed for a new ETF to track the Russell Top 200 Index, which includes the largest 200 companies (by market capitalization) of the broader Russell 3000 Index. In addition, prospectuses for funds tracking the Russell Top 200 Growth Index and Russell Top 200 Value Index were released. The Russell Top 200 Index represents approximately 65% of the market capitalization of listed U.S. equities, and is a popular benchmark for large cap funds. The growth index includes approximately 74%

By Matthew Hougan

What's the best U.S. total market ETF?

If you're looking at January performance, the answer is clear: the ELEMENTS Benjamin Graham Total Market ETN (BVT).

And not just by a little. BVT posted a positive 6.44% return in January, outpacing the next closest competitor (the iShares Russell 3000 Growth ETF, IWZ) by more than 11%.

I'm unable to find real-time data on what stocks the Elements ETN tracks and how it achieved its remarkable performance. But even if you look past BVT, you can see that the spread of performance for the various total market ETFs is significant.

If analysts ever had a true grip on the market, one might expect that their "Sell" ratings of stocks or ETFs would come near market highs. Similarly, one might expect that their "Buy" ratings would come closer to market lows. After all, the idea behind ratings is to buy lower and sell higher... isn't it?

However, stock and ETF ratings are notoriously late. First Call/Thomson Financial found that in the first 4 months of 2000, at the height of the previous bull market, less than 1% of stocks had a "Sell" rating by analysts.

That's right! Some 99% of stocks were worth holding or buying more shares!

If analysts are supposed to help you get out of stocks before they spiral downward, shouldn't 99% of stocks have been rated as "Sells" in 2000? Shouldn't there have been better guidance BEFORE the 2000-2002 bear?

I don't have the data on how

By Murray Coleman

If you're looking for exchange-traded funds to add, the pickings just got cheaper in many cases.

Earlier this month, Vanguard shaved its fees on four of its popular ETFs. Those were:

• Growth ETF (AMEX: VUG), from 0.11% to 0.10%.
• Value ETF (AMEX: VTV), from 0.11% to 0.10%.
• Small-Cap Growth ETF (AMEX: VBK), from 0.12% to 0.11%.
• Small-Cap Value ETF (AMEX: VBR), from 0.12% to 0.11%.

Also, the new Europe Pacific ETF (AMEX: VEA) wound up the year at 0.12%. The fund opened last July and was expected to assess expenses of around 0.15%.

"We originally estimated an annualized expense ratio at higher levels," said Rebecca Cohen, a Vanguard spokesperson. "But after the year closed out, expenses wound up being less than originally estimated."

While relatively tiny moves, the latest changes further distances Vanguard's ETF lineup from the pack. It also brings

It's doubtless that you've heard as many times as I have over the last few weeks various financial advisors touting large caps, generally, and large cap industrials as the place to be at this point in the economic cycle. More recently, I've also taken great interest in the growing debate regarding bottom fishing in value. Recently, SeekingAlpha ran a story written by the folks at Bespoke Investment Group. That article offered some evidence that "the rally in growth stocks has come to a grinding halt… as value stocks have taken back the reigns of outperformance".

If we are inclined to play into either (or both) of these supposed trends, which options have we? According to this review, we are allowed to purchases ETFs tracking the following, ex-international: 1) Industrials; 2) Large Cap; and, 3) Value, of small-, medium-, and large-cap persuasions.

The following opportunities lists are inexhaustive,