Core Insights - The Invesco RAFI Developed Markets ex-U.S. ETF (PXF) has achieved a 22.4% return over the past year, outperforming both the iShares MSCI EAFE ETF (EFA) and the SPDR S&P 500 ETF Trust (SPY) [2][3][6] - PXF's fundamental weighting methodology has favored value sectors such as financials and energy, aligning with the market's shift away from expensive U.S. growth stocks [3][6] - A significant factor in the performance of international equities has been the weakness of the U.S. dollar, which enhances the value of foreign earnings when converted back to dollars [4][6] Performance Comparison - PXF's return of 22.4% surpasses EFA's 18.7% and SPY's 19.2% over the same period, indicating a notable shift in market leadership [3][6] - The maximum drawdown for PXF was only 8.3%, reflecting a stable performance amidst market fluctuations [2] Currency Dynamics - The decline of the U.S. dollar against major currencies has provided a favorable environment for international stocks, benefiting U.S. investors through currency translation [4][6] - Monitoring the DXY Dollar Index is crucial for confirming ongoing trends in international market performance [5]

Core Insights - The Dimensional International Value ETF (DFIV) employs an active ex-US developed value strategy that consistently outperforms passive international value ETFs due to its active methodology and portfolio management [1] Group 1: Company Overview - DFIV is designed to deliver consistent alpha over other passive international value ETFs, indicating a strong performance relative to its peers [1] Group 2: Analyst Background - The analyst has over 20 years of experience in quantitative research, financial modeling, and risk management, focusing on equity valuation, market trends, and portfolio optimization [1] - The analyst previously held a Vice President position at Barclays, leading teams in model validation, stress testing, and regulatory finance, showcasing a deep expertise in both fundamental and technical analysis [1] - The analyst collaborates with a research partner to co-author investment research, combining strengths to provide high-quality, data-driven insights [1] Group 3: Research Focus - The research approach emphasizes rigorous risk management and a long-term perspective on value creation, with a particular interest in macroeconomic trends, corporate earnings, and financial statement analysis [1]

Core Viewpoint - International value stocks have gained significant attention in 2025, with notable performance from European banks, Japanese industrials, and Canadian energy companies, leading to a question of whether this trend is sustainable or a one-time event [1]. Group 1: Performance and Strategy - Dimensional International Value ETF (DFIV) achieved a remarkable 46.6% return over the past year while maintaining a low fee of 0.27% [1]. - DFIV focuses on undervalued companies in developed international markets, particularly in financials, energy, and materials, with a total asset value of $14.9 billion [1]. - The ETF outperformed the iShares MSCI EAFE ETF by 14.3 percentage points and the Vanguard Value ETF by over 30 percentage points, achieving a total return of 40% in 2025 [3]. Group 2: Market Conditions and Risks - Recent performance indicates a cooling trend, with a 4.6% gain over the past month and only 0.7% year-to-date in 2026, suggesting a moderation in explosive growth [4]. - DFIV's concentration in financials, energy, and materials introduces sector risk, particularly during periods of underperformance in these industries [5]. - Significant exposure to European markets means that EU political and economic developments directly impact returns, alongside currency fluctuations that add volatility [6]. Group 3: Investor Considerations - DFIV is best suited for patient investors seeking international diversification with a value tilt, but it requires conviction to endure potential cyclical underperformance [11]. - Short-term traders and those uncomfortable with international exposure should consider alternative investment strategies, as value investing often involves extended periods of underperformance [7][8]. - Vanguard FTSE Developed Markets ETF (VEA) is presented as a simpler alternative for investors seeking international exposure without the active value tilt, offering lower fees and broader market representation [9][10].

Core Viewpoint - International value stocks have underperformed US counterparts for over a decade, but the recent 47% surge of the Dimensional International Value ETF (DFIV) raises questions about whether this represents a genuine rotation or a temporary reversal [1][6]. Group 1: Fund Overview - DFIV provides exposure to undervalued companies in developed markets outside the US, using an active, research-driven approach to identify stocks trading below intrinsic value [2]. - The fund emphasizes strong profitability metrics and systematically tilts toward value characteristics, financial health indicators, and smaller market capitalizations, differentiating it from passive international funds [2]. - DFIV combines potential revaluation of underpriced stocks with a current dividend yield near 3%, delivering meaningful cash flow alongside capital appreciation potential [3]. Group 2: Performance Analysis - DFIV gained 47% over the past year, significantly outperforming the S&P 500's 16% and the iShares MSCI EAFE ETF by approximately 14 percentage points, while surpassing US value strategies by over 30 percentage points [6]. - This performance validates the international value thesis but complicates decisions for new investors, as much of the gain reflects a catch-up after years of underperformance [7]. Group 3: Portfolio Composition - Top holdings include European energy giants like Shell and TotalEnergies, financial institutions such as Banco Santander and HSBC, and Japanese industrials like Toyota, indicating a portfolio heavily weighted toward sectors trading at depressed valuations [4]. - The portfolio is concentrated in European financials and energy companies, which are vulnerable to regional economic slowdowns, regulatory pressures, and commodity price swings [9]. Group 4: Investment Considerations - DFIV is not suitable for short-term traders or those seeking growth characteristics, as it focuses on mature, often undervalued businesses and has a quarterly dividend structure [10]. - For broader international exposure without a value tilt, the Vanguard Total International Stock ETF (VXUS) offers a compelling alternative, charging lower fees and providing exposure to both value and growth stocks across developed and emerging markets [11].

Core Insights - Despite global challenges, markets continue to advance, leading to inflated valuations across various sectors [1] - Some international value ETFs remain undervalued, presenting potential upside for investors if stock prices align with fair value estimates [2] Group 1: Undervalued International Value ETFs - Schwab Fundamental International Equity ETF (FNDF) charges 25 basis points annually and returned 21% in the first seven months of 2025, yet its price remains below fair value [3][5] - The ETF tracks a fundamental index that weights stocks based on metrics like sales and cash flow, increasing exposure to cheaper stocks and reducing those that have become more expensive [4] - The fund's diversified allocation includes high-performing global companies, contributing to solid risk-adjusted returns and earning a silver Morning Star Metalist rating [5] Group 2: iShares MCI EHA Value ETF - iShares MCI EHA Value ETF (EFV) charges 33 basis points annually and also holds a silver Morning Star Metalist rating, focusing on the value factor [6] - The ETF utilizes market cap weighting to represent the cheaper half of the MCI EHA index, maintaining low turnover and accurately reflecting the international value market [7] - The fund has a pronounced exposure to financial stocks, with significant contributions from multinational banks like HSBC, which positively impacted its performance [8] Group 3: Dimensional International Value ETF - Dimensional International Value ETF (DFIV) returned nearly 24% in the first seven months of 2025, outperforming its peers and earning a silver medalist rating [9][10] - The ETF charges 27 basis points annually and follows a strategy that emphasizes diversification while focusing on smaller, profitable stocks with low valuations [10] - Despite its strong performance, the ETF still trades below its fair value estimate, indicating potential for further growth [11]

Core Insights - The Jpmorgan International Value ETF (NASDAQ: JIVE) is positioned as a new active international value investment option, aiming to outperform peers through a higher diversification strategy and significant exposure to emerging markets [1] Group 1: Company Overview - JIVE is characterized as a relatively new player in the international value ETF space, focusing on active management to enhance performance [1] Group 2: Investment Strategy - The ETF emphasizes a diversification bias, which is expected to provide better returns compared to its peers [1] - It includes a notable and agile exposure to emerging markets, which is a key component of its investment strategy [1]