Yahoo Finance Is iShares MSCI USA Value Factor ETF (VLUE) a Strong ETF Right Now?
The iShares MSCI USA Value Factor ETF (VLUE) was launched on 04/16/2013, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $6.88 billion, which makes 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
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 VLUE are 0.15%, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.56%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
VLUE's heaviest allocation is in the Information Technology sector, which is about 28.10% of the portfolio. Its Financials and Consumer Discretionary round out the top three.
When you look at individual holdings, Intel Corporation Corp (INTC) accounts for about 6.18% of the fund's total assets, followed by Cisco Systems Inc (CSCO) and At&t Inc (T).
VLUE's top 10 holdings account for about 34.14% of its total assets under management.
Performance and Risk
The ETF has added roughly 0.75% so far this year and was up about 11.55% in the last one year (as of 04/17/2024). In the past 52-week period, it has traded between $85.95 and $108.31.
VLUE has a beta of 1.04 and standard deviation of 17.56% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 155 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 $53.21 billion in assets, Vanguard Value ETF has $110.71 billion. SCHD has an expense ratio of 0.06% and VTV 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 - 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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iShares MSCI USA Value Factor ETF (VLUE): ETF Research Reports
Intel Corporation (INTC) : Free Stock Analysis Report
AT&T Inc. (T) : Free Stock Analysis Report
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
Vanguard Value ETF (VTV): ETF Research Reports
Schwab U.S. Dividend Equity ETF (SCHD): ETF Research Reports
