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Is iShares MSCI USA Value Factor ETF (VLUE) a Strong ETF Right Now?

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A smart beta exchange traded fund, the iShares MSCI USA Value Factor ETF (VLUE - Free Report) debuted on 04/16/2013, and offers broad exposure to the Style Box - Large Cap Value category of the market.

What Are Smart Beta ETFs?

For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.

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.

However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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

Managed by Blackrock, VLUE has amassed assets over $7.2 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, 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

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 0.15% for VLUE, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 2.51%.

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.

Representing 32.6% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Consumer Discretionary round out the top three.

Taking into account individual holdings, Cisco Systems Inc (CSCO) accounts for about 7.16% of the fund's total assets, followed by Intel Corporation Corp (INTC) and Micron Technology Inc (MU).

Its top 10 holdings account for approximately 33.85% of VLUE's total assets under management.

Performance and Risk

So far this year, VLUE has added about 15.04%, and is up roughly 17.58% in the last one year (as of 09/10/2025). During this past 52-week period, the fund has traded between $93.50 and $120.42.

The fund has a beta of 0.98 and standard deviation of 16.67% for the trailing three-year period, which makes VLUE a medium risk choice in this particular space. With about 153 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.

Schwab U.S. Dividend Equity ETF (SCHD) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $71.46 billion in assets, Vanguard Value ETF has $144.33 billion. SCHD has an expense ratio of 0.06% and VTV changes 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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