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Should iShares MSCI USA Min Vol Factor ETF (USMV) Be on Your Investing Radar?
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Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the iShares MSCI USA Min Vol Factor ETF (USMV - Free Report) , a passively managed exchange traded fund launched on 10/18/2011.
The fund is sponsored by Blackrock. It has amassed assets over $26.97 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.41%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 21.90% of the portfolio. Healthcare and Consumer Staples round out the top three.
Looking at individual holdings, Verizon Communications Inc (VZ - Free Report) accounts for about 1.70% of total assets, followed by Johnson & Johnson (JNJ - Free Report) and Kroger (KR - Free Report) .
The top 10 holdings account for about 15.35% of total assets under management.
Performance and Risk
USMV seeks to match the performance of the MSCI USA Minimum Volatility Index before fees and expenses. The MSCI USA Minimum Volatility (USD) Index is composed of U.S. equities that, in the aggregate, have lower volatility characteristics relative to the broader U.S. equity market.
The ETF has lost about -9.88% so far this year and is up roughly 0.78% in the last one year (as of 05/17/2022). In the past 52-week period, it has traded between $70.81 and $81.04.
The ETF has a beta of 0.77 and standard deviation of 20.21% for the trailing three-year period, making it a medium risk choice in the space. With about 177 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Min Vol Factor ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, USMV is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Core S&P 500 ETF (IVV - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $284.47 billion in assets, SPDR S&P 500 ETF has $360.56 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
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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Should iShares MSCI USA Min Vol Factor ETF (USMV) Be on Your Investing Radar?
Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the iShares MSCI USA Min Vol Factor ETF (USMV - Free Report) , a passively managed exchange traded fund launched on 10/18/2011.
The fund is sponsored by Blackrock. It has amassed assets over $26.97 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.41%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 21.90% of the portfolio. Healthcare and Consumer Staples round out the top three.
Looking at individual holdings, Verizon Communications Inc (VZ - Free Report) accounts for about 1.70% of total assets, followed by Johnson & Johnson (JNJ - Free Report) and Kroger (KR - Free Report) .
The top 10 holdings account for about 15.35% of total assets under management.
Performance and Risk
USMV seeks to match the performance of the MSCI USA Minimum Volatility Index before fees and expenses. The MSCI USA Minimum Volatility (USD) Index is composed of U.S. equities that, in the aggregate, have lower volatility characteristics relative to the broader U.S. equity market.
The ETF has lost about -9.88% so far this year and is up roughly 0.78% in the last one year (as of 05/17/2022). In the past 52-week period, it has traded between $70.81 and $81.04.
The ETF has a beta of 0.77 and standard deviation of 20.21% for the trailing three-year period, making it a medium risk choice in the space. With about 177 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Min Vol Factor ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, USMV is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Core S&P 500 ETF (IVV - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $284.47 billion in assets, SPDR S&P 500 ETF has $360.56 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
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.