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Is iShares MSCI USA Value Factor ETF (VLUE) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the iShares MSCI USA Value Factor ETF (VLUE - Free Report) is a smart beta exchange traded fund launched on 04/16/2013.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Blackrock. It has amassed assets over $7.24 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.15%, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 3.20%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
VLUE's heaviest allocation is in the Information Technology sector, which is about 25.30% of the portfolio. Its Healthcare and Financials round out the top three.
Taking into account individual holdings, At&t Inc (T - Free Report) accounts for about 5.16% of the fund's total assets, followed by Intel Corporation Corp (INTC - Free Report) and Cisco Systems Inc (CSCO - Free Report) .
The top 10 holdings account for about 26.96% of total assets under management.
Performance and Risk
So far this year, VLUE has gained about 2.45%, and is down about -8.62% in the last one year (as of 04/03/2023). During this past 52-week period, the fund has traded between $81.86 and $105.81.
The fund has a beta of 1.05 and standard deviation of 22.07% for the trailing three-year period, which makes VLUE a medium risk choice in this particular space. With about 155 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 $50.56 billion in assets, Vanguard Value ETF has $101.13 billion. IWD has an expense ratio of 0.18% 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?
Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the iShares MSCI USA Value Factor ETF (VLUE - Free Report) is a smart beta exchange traded fund launched on 04/16/2013.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Blackrock. It has amassed assets over $7.24 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.15%, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 3.20%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
VLUE's heaviest allocation is in the Information Technology sector, which is about 25.30% of the portfolio. Its Healthcare and Financials round out the top three.
Taking into account individual holdings, At&t Inc (T - Free Report) accounts for about 5.16% of the fund's total assets, followed by Intel Corporation Corp (INTC - Free Report) and Cisco Systems Inc (CSCO - Free Report) .
The top 10 holdings account for about 26.96% of total assets under management.
Performance and Risk
So far this year, VLUE has gained about 2.45%, and is down about -8.62% in the last one year (as of 04/03/2023). During this past 52-week period, the fund has traded between $81.86 and $105.81.
The fund has a beta of 1.05 and standard deviation of 22.07% for the trailing three-year period, which makes VLUE a medium risk choice in this particular space. With about 155 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 $50.56 billion in assets, Vanguard Value ETF has $101.13 billion. IWD has an expense ratio of 0.18% 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.