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Should iShares MSCI USA Value Factor ETF (VLUE) Be on Your Investing Radar?
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Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider the iShares MSCI USA Value Factor ETF (VLUE - Free Report) , a passively managed exchange traded fund launched on 04/16/2013.
The fund is sponsored by Blackrock. It has amassed assets over $7.02 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies usually 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.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 2.66%.
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 Information Technology sector--about 30.30% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Intel Corporation Corp (INTC - Free Report) accounts for about 5.91% of total assets, followed by At&t Inc (T - Free Report) and Cisco Systems Inc (CSCO - Free Report) .
The top 10 holdings account for about 34.52% of total assets under management.
Performance and Risk
VLUE seeks to match the performance of the MSCI USA Enhanced Value Index before fees and expenses. 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.
The ETF has gained about 13.94% so far this year and was up about 13.83% in the last one year (as of 01/01/2024). In the past 52-week period, it has traded between $85.95 and $101.55.
The ETF has a beta of 1.05 and standard deviation of 18.05% for the trailing three-year period, making it a medium risk choice in the space. With about 152 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Value Factor 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, VLUE is an outstanding 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 iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $55.28 billion in assets, Vanguard Value ETF has $105.40 billion. IWD has an expense ratio of 0.19% 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.
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Should iShares MSCI USA Value Factor ETF (VLUE) Be on Your Investing Radar?
Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider the iShares MSCI USA Value Factor ETF (VLUE - Free Report) , a passively managed exchange traded fund launched on 04/16/2013.
The fund is sponsored by Blackrock. It has amassed assets over $7.02 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies usually 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.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 2.66%.
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 Information Technology sector--about 30.30% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Intel Corporation Corp (INTC - Free Report) accounts for about 5.91% of total assets, followed by At&t Inc (T - Free Report) and Cisco Systems Inc (CSCO - Free Report) .
The top 10 holdings account for about 34.52% of total assets under management.
Performance and Risk
VLUE seeks to match the performance of the MSCI USA Enhanced Value Index before fees and expenses. 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.
The ETF has gained about 13.94% so far this year and was up about 13.83% in the last one year (as of 01/01/2024). In the past 52-week period, it has traded between $85.95 and $101.55.
The ETF has a beta of 1.05 and standard deviation of 18.05% for the trailing three-year period, making it a medium risk choice in the space. With about 152 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Value Factor 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, VLUE is an outstanding 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 iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $55.28 billion in assets, Vanguard Value ETF has $105.40 billion. IWD has an expense ratio of 0.19% 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.