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Is iShares U.S. Equity Factor ETF (LRGF) a Strong ETF Right Now?
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The iShares U.S. Equity Factor ETF (LRGF - Free Report) made its debut on 04/28/2015, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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 managed by Blackrock. LRGF has been able to amass assets over $1.57 billion, making it one of the largest ETFs in the Style Box - All Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the MSCI USA Diversified Multiple-Factor Index.
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
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.
Operating expenses on an annual basis are 0.08% for this ETF, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.49%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
LRGF's heaviest allocation is in the Information Technology sector, which is about 31.10% of the portfolio. Its Financials and Healthcare round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 6.85% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Amazon Com Inc (AMZN - Free Report) .
LRGF's top 10 holdings account for about 27.65% of its total assets under management.
Performance and Risk
The ETF has gained about 0.23% and it's up approximately 23.61% so far this year and in the past one year (as of 01/11/2024), respectively. LRGF has traded between $39.14 and $48.47 during this last 52-week period.
The ETF has a beta of 0.99 and standard deviation of 17.64% for the trailing three-year period, making it a medium risk choice in the space. With about 300 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Equity Factor ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $9.30 billion in assets, iShares Core S&P U.S. Value ETF has $15.53 billion. DFAT has an expense ratio of 0.28% 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?
The iShares U.S. Equity Factor ETF (LRGF - Free Report) made its debut on 04/28/2015, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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 managed by Blackrock. LRGF has been able to amass assets over $1.57 billion, making it one of the largest ETFs in the Style Box - All Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the MSCI USA Diversified Multiple-Factor Index.
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
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.
Operating expenses on an annual basis are 0.08% for this ETF, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.49%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
LRGF's heaviest allocation is in the Information Technology sector, which is about 31.10% of the portfolio. Its Financials and Healthcare round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 6.85% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Amazon Com Inc (AMZN - Free Report) .
LRGF's top 10 holdings account for about 27.65% of its total assets under management.
Performance and Risk
The ETF has gained about 0.23% and it's up approximately 23.61% so far this year and in the past one year (as of 01/11/2024), respectively. LRGF has traded between $39.14 and $48.47 during this last 52-week period.
The ETF has a beta of 0.99 and standard deviation of 17.64% for the trailing three-year period, making it a medium risk choice in the space. With about 300 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Equity Factor ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $9.30 billion in assets, iShares Core S&P U.S. Value ETF has $15.53 billion. DFAT has an expense ratio of 0.28% 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.