In the early morning today, the Federal Reserve announced a 50 basis point rate cut, lowering the target range for the federal funds rate from 5.25% to 5.5% to 4.75% to 5%. The Federal Reserve has initiated a monetary easing cycle with an aggressive first step. Nomura Securities found that three months after a 50 basis point rate cut by the Federal Reserve, value stocks outperformed growth stocks based on historical data.

Value stocks typically represent companies with lower price-to-earnings ratios and higher dividend yields. These companies are often mature and well-established large enterprises. Compared to growth stocks, value stocks tend to be more defensive during economic fluctuations, making them attractive in a rate cut environment. For investors who want to maintain stable returns in a rate cut environment, value ETFs have become an investment option worth considering.

The September Bank of America Merrill Lynch Manager's survey report shows that managers expect value stocks to outperform growth stocks, with the highest bullish sentiment in nearly ten months, and a preference for high-quality stocks. Among them, 79% of managers expect that the Fed's interest rate cut will support the U.S. economy.But after the bursting of the internet bubble and the Fed's rate cut in 2001, the ROI dropped by more than 10%.Funds are flowing into interest-sensitive assets such as bonds and utilities that benefit from interest rate cuts, and cash allocation has decreased to 4.2%.

According to Bloomberg's industry research data, as of yesterday, value-focused exchange-traded funds (ETFs) have attracted $6.9 billion in inflows in September, making it the best-performing month this year. Among the funds flowing into value ETFs in September, over half of the funds flowed into $EAFE Value Index MSCI Ishares (EFV.US)$ This ETF is a beneficiary of BlackRock's adjusted model investment portfolio strategy.

During yesterday's regular trading hours, several large-cap value ETFs reached new intraday highs, but then declined along with the overall stock market. Among them, the largest large-cap value ETF in terms of assets under management $Vanguard Value ETF (VTV.US)$ Intraday once touched $174.349, setting another intraday all-time high, with a cumulative increase of over 16% since the beginning of the year. VTV invests in stable industries such as finance, healthcare, and consumer goods, providing good dividend income and low volatility.

It is worth noting that among the VTV holdings,$Home Depot (HD.US)$yesterday set a new intraday all-time high at $392.67, up more than 12% in the second half of the year; while$Walmart (WMT.US)$,$Procter & Gamble (PG.US)$and$Berkshire Hathaway-B (BRK.B.US)$N/A.$UnitedHealth (UNH.US)$Several held stocks have reached their all-time high prices in the middle of this month.

In addition, other large value ETFs that performed well in September include$Spdr Series Trust Spdr Portfolio S&P 500 Value Etf (SPYV.US)$ The fund inflow of this ETF reached a historical high last week, with a size of $3.2 billion.$Ishares Russell Top 200 Value Etf (IWX.US)$It has also attracted over $0.8 billion in funds this month, and both of these ETFs reached their historical high in yesterday's trading.

In addition to large-cap value stock ETFs, investors can also pay attention to value ETFs that track mid-small cap stocks.

As long as the economy does not fall into a recession, interest rate cuts are generally beneficial for the stock market, and small-cap stocks can benefit more from loose monetary policy than large-cap stocks. Some Wall Street strategists believe that under the macro background of the Fed opening interest rate cuts, the performance of mid-small cap stocks may far exceed the seven major technology giants of the US stock market and widely traded large-cap stocks.

Mid-small cap stocks are often very sensitive to the benchmark interest rates set by the Fed, and they rely heavily on floating rate loans. Therefore, in the context of the Fed's interest rate cuts, it means that their long-term debt-end pressure has been greatly reduced, which is expected to improve profit margins and stock valuations. Mid-small cap stock ETF $CNI Small Cap Value Index (VBR.US)$ has assets under management exceeding $57 billion, and it also reached a historical high in yesterday's trading. It has accumulated a more than 11% increase year-to-date. $Vanguard Small-Cap Value ETF (VBR.US)$ It has also attracted over $0.8 billion in funds this month, and both of these ETFs reached their historical high in yesterday's trading.

cni small cap.value index benchmark——$Russell 2000 Index (.RUT.US)$ It has achieved 6 consecutive gains, rising 2.4% at one point during yesterday's regular trading hours. Although the gain narrowed to only 0.2% later, it was still stronger than the simultaneous decline of the three major stock indexes in the USA. Investors can pay attention to trackingE-mini Russell 2000 Index related ETFs, including: $Ishares Russell 2000 Value Etf (IWN.US)$and $Vanguard Russell 2000 ETF (VTWO.US)$ According to documents filed with the U.S. Securities and Exchange Commission (SEC), some of the most prominent actions Third Point took in the second quarter, respectively, were to establish positions, shareholding of and more.

How to find the desired ETF? The ETF section can help you! Mooers can click on Market >ETF> Choose from a variety of ETFs in different markets.

Editor / jayden