iQ Large Cap Value Model
INVESTMENT OBJECTIVE
The iQ Large Cap Value Model seeks to generate long-term returns in excess of the total return of the S&P 500 Barra Value Index, with less down-market volatility than the index.
PROCESS
The iQ Large Cap Value Model is an equal-weighted portfolio of large and blue-chip stocks exhibiting robust seasonal relative strength, share buyback, and value momentum.
Start with the stocks of the S&P 500 Index
Select the 250 companies with the lowest price-to-book ratio.
Sort by valuation versus earnings growth and share buyback and select the top 200
Sort by 4-year seasonal relative strength and select the top 40.
Sort by value momentum select the top 10.
This model reconstitutes every February, May, August and November
Why invest in large cap value stocks?
Potential benefits of investing in large-cap value stocks include:
Lower valuation: Large-cap value stocks are typically undervalued by the market, which means that they may offer investors a lower entry point compared to growth stocks.
Attractive dividend yields: Large-cap value stocks often have high dividend yields, which can provide investors with a steady stream of income.
Established market leaders: Large-cap value stocks are often well-established companies with established market positions and strong brand recognition.
Diversification benefits: Investing in large-cap value stocks can help diversify a portfolio, as they often come from different sectors and industries.
Investing in large-cap value stocks involves risks and uncertainties. Large-cap value stocks are shares of established companies that are believed to be undervalued relative to their intrinsic worth. While these stocks may offer stability and potential dividends, their prices can be affected by market fluctuations, economic conditions, and specific industry or company developments.