The iShares Russell 1000 Value ETF (
IWD Quick Quote IWD - Free Report) was launched on 05/22/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $55.61 billion, making it one of the largest ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies 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.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.19%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.72%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 20.60% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc Class B (
BRK.B Quick Quote BRK.B - Free Report) accounts for about 2.54% of total assets, followed by Jpmorgan Chase & Co ( JPM Quick Quote JPM - Free Report) and Johnson & Johnson ( JNJ Quick Quote JNJ - Free Report) . Performance and Risk
IWD seeks to match the performance of the Russell 1000 Value Index before fees and expenses. The Russell 1000 Value Index measures the performance of the large-capitalization value sector of the U.S. equity market.
The ETF has lost about -5.93% so far this year and is up roughly 6.78% in the last one year (as of 03/14/2022). In the past 52-week period, it has traded between $148.80 and $170.51.
The ETF has a beta of 0.99 and standard deviation of 23.41% for the trailing three-year period, making it a medium risk choice in the space. With about 852 holdings, it effectively diversifies company-specific risk.
IShares Russell 1000 Value ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IWD is a great option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard High Dividend Yield ETF (
VYM Quick Quote VYM - Free Report) and the Vanguard Value ETF ( VTV Quick Quote VTV - Free Report) track a similar index. While Vanguard High Dividend Yield ETF has $41.75 billion in assets, Vanguard Value ETF has $91.50 billion. VYM has an expense ratio of 0.06% and VTV charges 0.04%. 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.