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Is iShares U.S. Equity Factor ETF (LRGF) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - All Cap Value category of the market, the iShares U.S. Equity Factor ETF (LRGF - Free Report) is a smart beta exchange traded fund launched on 04/28/2015.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $2.26 billion, which makes 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
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.
Operating expenses on an annual basis are 0.08% for LRGF, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.27%.
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.
For LRGF, it has heaviest allocation in the Information Technology sector --about 30.40% of the portfolio --while Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 6.68% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 31.42% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Equity Factor ETF has lost about -3.47% so far, and is up about 9.46% over the last 12 months (as of 04/02/2025). LRGF has traded between $50.75 and $63.95 in this past 52-week period.
The fund has a beta of 0.96 and standard deviation of 17.10% for the trailing three-year period, which makes LRGF a medium risk choice in this particular space. With about 282 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.
Capital Group Dividend Value ETF (CGDV - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Capital Group Dividend Value ETF has $14.36 billion in assets, iShares Core S&P U.S. Value ETF has $20.17 billion. CGDV has an expense ratio of 0.33% 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?
Designed to provide broad exposure to the Style Box - All Cap Value category of the market, the iShares U.S. Equity Factor ETF (LRGF - Free Report) is a smart beta exchange traded fund launched on 04/28/2015.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $2.26 billion, which makes 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
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.
Operating expenses on an annual basis are 0.08% for LRGF, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.27%.
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.
For LRGF, it has heaviest allocation in the Information Technology sector --about 30.40% of the portfolio --while Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 6.68% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 31.42% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Equity Factor ETF has lost about -3.47% so far, and is up about 9.46% over the last 12 months (as of 04/02/2025). LRGF has traded between $50.75 and $63.95 in this past 52-week period.
The fund has a beta of 0.96 and standard deviation of 17.10% for the trailing three-year period, which makes LRGF a medium risk choice in this particular space. With about 282 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.
Capital Group Dividend Value ETF (CGDV - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Capital Group Dividend Value ETF has $14.36 billion in assets, iShares Core S&P U.S. Value ETF has $20.17 billion. CGDV has an expense ratio of 0.33% 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.