The iShares MSCI USA Min Vol Factor ETF (
USMV Quick Quote USMV - Free Report) was launched on 10/18/2011, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $29.47 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
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 least expensive products in the space.
It has a 12-month trailing dividend yield of 1.31%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 25.50% of the portfolio. Healthcare and Consumer Staples round out the top three.
Looking at individual holdings, Microsoft Corp (
MSFT Quick Quote MSFT - Free Report) accounts for about 1.87% of total assets, followed by Accenture Plc Class A ( ACN Quick Quote ACN - Free Report) and Eli Lilly ( LLY Quick Quote LLY - Free Report) .
The top 10 holdings account for about 15.61% 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 -2.55% so far this year and was up about 16.08% in the last one year (as of 01/11/2022). In the past 52-week period, it has traded between $65.18 and $81.04.
The ETF has a beta of 0.76 and standard deviation of 19.47% for the trailing three-year period, making it a medium risk choice in the space. With about 188 holdings, it effectively diversifies company-specific risk.
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 an excellent 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 Quick Quote IVV - Free Report) and the SPDR S&P 500 ETF ( SPY Quick Quote SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $328.18 billion in assets, SPDR S&P 500 ETF has $447.88 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%. Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.