This is an actively managed value ETF that treats pricing distortions in the U.S. stock market as opportunities and selects undervalued stocks. It does not track a specific index. The manager's valuation judgment determines which stocks are held and at what weights.

It suits medium- to long-term value investors who are willing to pay for the manager's stock-selection judgment instead of a passive value index.

The ETF is run by GMO using an active (discretionary) management approach.

The manager reviews companies' disclosed financials and share prices, conditions in other markets such as bonds and currencies, and the macro environment and policy changes to identify pricing distortions in the U.S. stock market. It then selects and holds the stocks it judges to be undervalued. Position weights are set by the management team's valuation assessments, not by index rules.

• Discretionary stock selection by the manager instead of index replication
• Portfolio centered on traditional value sectors such as energy, health care and financials
• Mainly U.S. equities, so overseas exposure is limited

Assets under management (AUM) stand at $101.0M, and the total expense ratio is 0.50% per year.

Because of its active structure, the fee burden tends to be higher than that of large passive value ETFs, and trading volume and bid-ask spreads can also be less favorable than those of larger products.

The ETF broadly follows the value style, but its active selection process leads to periods when its performance diverges from large-cap value indexes. It tends to lag when growth stocks lead the market and to show relative strength when valuation concerns come to the fore.

Fund flows into value-style ETFs react sensitively to the direction of interest rates and to debates over growth-stock valuations. This ETF is small to mid-sized within its category, so swings in fund inflows and outflows can have a relatively larger effect on its performance and trading conditions than they would for larger products.

Exposure to the manager's value-selection skill is what sets this ETF apart, but it comes with a heavier fee burden and the possibility of performance deviating from the index.

The three products shown in the table, VTV, IVE and SPYV, are low-cost funds that track U.S. large-cap value indexes directly. Compared with this ETF, they lead on fees and assets under management but offer no discretion in stock selection. IWD tracks the Russell 1000 Value Index, which has a broader range of holdings, while VBR focuses on small-cap value, so its market-cap range is entirely different. Options outside the table include RPV, which narrows its holdings using valuation scores, VLUE and AVLV, which also consider quality, and SCHD, which focuses on dividend growth.

Here are the items worth checking before investing in this ETF. It is not a product that follows an index but an active value product in which the manager picks the stocks, so you should consider the cost burden, the management style and the trading conditions that come with its size.

If a downturn in the value style itself coincides with poor management decisions, the ETF could fall behind large value indexes twice over. Investors should also consider that, with modest assets under management, trading costs may turn out higher than expected.

This product is worth considering for investors who want U.S. value exposure combined with a manager's selection judgment. If cost is your priority, consider passive alternatives such as VTV and SPYV. If you are willing to pay for discretionary selection, consider this ETF.