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Is iShares U.S. Equity Factor ETF (LRGF) a Strong ETF Right Now?
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Launched on 04/28/2015, the iShares U.S. Equity Factor ETF (LRGF - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the 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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination 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
The fund is sponsored by Blackrock. It has amassed assets over $1.24 billion, making it one of the largest ETFs in the Style Box - All Cap Value. LRGF seeks to match the performance of the MSCI USA Diversified Multiple-Factor Index before fees and expenses.
The STOXX U.S. Equity Factor Index composes of U.S. large and mid-capitalization stocks that have favourable exposure to target style factors subject to constraints.
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 LRGF are 0.08%, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.71%.
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.
Representing 28.80% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Healthcare and Financials round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 5.34% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Amazon Com Inc (AMZN - Free Report) .
LRGF's top 10 holdings account for about 20.12% of its total assets under management.
Performance and Risk
The ETF has added about 4.20% and is down about -2.14% so far this year and in the past one year (as of 02/27/2023), respectively. LRGF has traded between $36.22 and $45.54 during this last 52-week period.
The ETF has a beta of 0.98 and standard deviation of 25.79% for the trailing three-year period, making it a medium risk choice in the space. With about 334 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Equity Factor ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Dimensional U.S. Targeted Value ETF (DFAT - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $8.14 billion in assets, iShares Core S&P U.S. Value ETF has $13.05 billion. DFAT has an expense ratio of 0.29% and IUSV 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 - All 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 U.S. Equity Factor ETF (LRGF) a Strong ETF Right Now?
Launched on 04/28/2015, the iShares U.S. Equity Factor ETF (LRGF - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the 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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination 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
The fund is sponsored by Blackrock. It has amassed assets over $1.24 billion, making it one of the largest ETFs in the Style Box - All Cap Value. LRGF seeks to match the performance of the MSCI USA Diversified Multiple-Factor Index before fees and expenses.
The STOXX U.S. Equity Factor Index composes of U.S. large and mid-capitalization stocks that have favourable exposure to target style factors subject to constraints.
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 LRGF are 0.08%, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.71%.
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.
Representing 28.80% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Healthcare and Financials round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 5.34% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Amazon Com Inc (AMZN - Free Report) .
LRGF's top 10 holdings account for about 20.12% of its total assets under management.
Performance and Risk
The ETF has added about 4.20% and is down about -2.14% so far this year and in the past one year (as of 02/27/2023), respectively. LRGF has traded between $36.22 and $45.54 during this last 52-week period.
The ETF has a beta of 0.98 and standard deviation of 25.79% for the trailing three-year period, making it a medium risk choice in the space. With about 334 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Equity Factor ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Dimensional U.S. Targeted Value ETF (DFAT - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $8.14 billion in assets, iShares Core S&P U.S. Value ETF has $13.05 billion. DFAT has an expense ratio of 0.29% and IUSV 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 - All 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.