When one thinks of "value" stocks, the immediate impression is that of a more conservative, undervalued stock that typically offers a higher yield. The SPDR S&P 500 Value ETF (NYSEARCA:SPYV), for example, has a P/E ratio of 16.3 and a dividend yield of 2.5%, compared to the P/E of 18.3 and dividend yield of 2.1% for the SPDR S&P 500 Trust ETF (NYSEARCA:SPY). It's a simplistic example, but the trend holds true for large caps, mid caps and small caps alike.
Deep value, however, should be considered riskier. It's really more of a turnaround play than a pure value play. Some of these turnaround stories play out, and some of them get worse before they get better (if they get better at all). While the P/E ratio for a deep value portfolio may be especially low, part of the reason for that could be that many stocks within the fund may have been beaten down by the economic environment.
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