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Should iShares MSCI USA Min Vol Factor ETF (USMV) Be on Your Investing Radar?

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The iShares MSCI USA Min Vol Factor ETF (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 $28.11 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. They tend to be stable companies with predictable cash flows and are usually less volatile 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.


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 0.15%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.71%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Healthcare sector--about 19.60% of the portfolio. Information Technology and Consumer Staples round out the top three.

Looking at individual holdings, Cisco Systems Inc (CSCO - Free Report) accounts for about 1.62% of total assets, followed by Merck & Co Inc (MRK - Free Report) and Texas Instrument Inc (TXN - Free Report) .

The top 10 holdings account for about 15.25% 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 -0.47% so far this year and is down about -1.09% in the last one year (as of 06/01/2023). In the past 52-week period, it has traded between $65.75 and $76.63.

The ETF has a beta of 0.75 and standard deviation of 14.50% for the trailing three-year period, making it a medium risk choice in the space. With about 169 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 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 $310.55 billion in assets, SPDR S&P 500 ETF has $392.96 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.


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.

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