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Is iShares MSCI USA Value Factor ETF (VLUE) a Strong ETF Right Now?
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A smart beta exchange traded fund, the iShares MSCI USA Value Factor ETF (VLUE - Free Report) debuted on 04/16/2013, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Blackrock, VLUE has amassed assets over $12.92 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. Before fees and expenses, VLUE seeks to match the performance of the MSCI USA Enhanced Value Index.
The MSCI USA Enhanced Value Index is based on a traditional market capitalization-weighted parent index, the MSCI USA Index which includes U.S. large and mid capitalization stocks.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for VLUE are 0.15%, which makes it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 2.32%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 25.60% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Healthcare and Consumer Discretionary round out the top three.
Taking into account individual holdings, At&t Inc (T - Free Report) accounts for about 6.44% of the fund's total assets, followed by Intel Corporation Corp (INTC - Free Report) and General Motors (GM - Free Report) .
VLUE's top 10 holdings account for about 26.48% of its total assets under management.
Performance and Risk
The ETF has lost about -5.67% so far this year and it's up approximately 5.90% in the last one year (as of 03/24/2022). In the past 52-week period, it has traded between $100.54 and $114.92.
The ETF has a beta of 1.05 and standard deviation of 26.04% for the trailing three-year period, making it a medium risk choice in the space. With about 153 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Value Factor ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $57.56 billion in assets, Vanguard Value ETF has $100.51 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is iShares MSCI USA Value Factor ETF (VLUE) a Strong ETF Right Now?
A smart beta exchange traded fund, the iShares MSCI USA Value Factor ETF (VLUE - Free Report) debuted on 04/16/2013, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Blackrock, VLUE has amassed assets over $12.92 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. Before fees and expenses, VLUE seeks to match the performance of the MSCI USA Enhanced Value Index.
The MSCI USA Enhanced Value Index is based on a traditional market capitalization-weighted parent index, the MSCI USA Index which includes U.S. large and mid capitalization stocks.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for VLUE are 0.15%, which makes it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 2.32%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 25.60% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Healthcare and Consumer Discretionary round out the top three.
Taking into account individual holdings, At&t Inc (T - Free Report) accounts for about 6.44% of the fund's total assets, followed by Intel Corporation Corp (INTC - Free Report) and General Motors (GM - Free Report) .
VLUE's top 10 holdings account for about 26.48% of its total assets under management.
Performance and Risk
The ETF has lost about -5.67% so far this year and it's up approximately 5.90% in the last one year (as of 03/24/2022). In the past 52-week period, it has traded between $100.54 and $114.92.
The ETF has a beta of 1.05 and standard deviation of 26.04% for the trailing three-year period, making it a medium risk choice in the space. With about 153 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Value Factor ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $57.56 billion in assets, Vanguard Value ETF has $100.51 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.