33 ETFs with P/Es Below 10

ETF Database

The Price-to-Earnings (P/E) ratio is one of the most popular valuation metrics in the investing world. It is calculated by dividing a security’s current price by its earnings. As a general rule, a P/E of around 15 for broad stocks is the norm, though that figure can vary greatly by industry and depending on market conditions. Many investors look to identify ETFs with P/E ratios below the industry norm, as those funds can be deemed “undervalued” relative to the market. It is a strategy that has been used for quite some time and remains one of the must frequently quoted fundamental metrics.

Currently, the SPDR S&P 500 ETF (SPY, A) has a P/E ratio of 15.24, setting the mark for a “standard” measure for other ETFs. We found 33 ETFs that not only have P/Es lower than that of SPY, but their price-to-earning multiples fall below 10:

ETF P/E Ratio Assets YTD Return
Listed Private Equity (PSP, A 3.86 $585M -0.92%
Market Vectors Russia Small-Cap ETF (RSXJ, C 4.85 $36M -28.9%
iShares MSCI Russia Capped ETF (ERUS, B- 4.99 $233M -21.6%
iShares Mortgage Real Estate Capped ETF (REM, B- 5.37 $1,231M 12.8%
iShares MSCI Emerging Markets Eastern Europe ETF (ESR, B- 5.85 $134M -15.6%
Energy AlphaDEX Fund (FXN, B+ 5.97 $700M 8.4%
India Small-Cap Index ETF (SCIF, C 6.12 $188M 19.8%
China Financials ETF (CHIX, C+ 6.75 $16M -14.1%
Egypt Index ETF (EGPT, C) 7.11 $75M 33.2%
S&P International Developed High Quality Portfolio Fund (IDHQ, B 7.85 $22M 3.0%
Financials GEMS ETF (FGEM, C 8.11 $3M -6.6%
iShares China Large-Cap ETF (FXI, B 8.32 $4,681M -9.6%
WilderHill Progressive Energy Portfolio (PUW, A- 8.59 $46M 1.5%
MSCI Emerging Markets EMEA Index Fund (EEME, B 8.62 $10M -6.5%
China Materials ETF (CHIM, C 8.63 $2M -7.3%
FTSE China (HK Listed) Index Fund (FCHI, B- 8.96 $27M -9.7%
Market Vectors Junior Gold Miners ETF (GDXJ, B+ 9.16 $1,879M 19.4%
MSCI BRIC Index Fund (BKF, B 9.20 $385M -4.4%
iShares MSCI China ETF(MCHI, B+ 9.32 $862M -9.3%
S&P 500 Pure Value ETF (RPV, B- 9.33 $864M 5.1%
SPDR S&P China ETF (GXC, A 9.47 $758M -9.4%
SPDR S&P BRIC 40 (BIK, B 9.48 $154M -7.5%
MSCI Emerging Markets Financials Sector Index Fund (EMFN, C 9.54 $6M 0%
MSCI Turkey ETF (TUR, B+ 9.57 $551M 13.4%
iShares MSCI China Small-Cap ETF (ECNS, A+ 9.62 $31M -3.8%
iShares Asia 50 ETF (AIA, A- 9.67 $266M -3.2%
Emerging Markets Equity Income Fund (DEM, A- 9.69 $3,772M -3.0%
Pure Gold Miners ETF (GGGG, C 9.74 $4M 26.3%
China All-Cap ETF (YAO, B+) 9.77 $54M -10.6%
iShares MSCI South Korea Capped ETF (EWY, B- 9.90 $4,319M -3.3%
SPDR S&P Emerging Markets Dividend ETF (EDIV, A- 9.91 $488M 1.3%
Market Vectors-Africa Index ETF (AFK, B+) 9.96 $120M 7.1%
Financials Sector Fund (RWW, B 9.99 $32M -0.6%

The Bottom Line
A low P/E ratio is not a “buy” indicator on its own, but rather a metric to help identify securities that may be undervalued. Remember that a fund’s sector or industry must always be taken into account as well. There are some sectors (like technology) that are known for having high P/Es, and some industries known for the opposite. Finding a fund whose multiple is below the benchmark for its investment objective is a good jumping off point to find a prospective undervalued investment. Remember to always do your homework and use this multiple as one of many metrics and tools when it comes time for you to choose your allocation.

Follow me on Twitter @JaredCummans.

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Disclosure: No positions at time of writing.

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