Zacks Investment Research
January 1, 2024, Monday, at 4:50 PM GMT+5:30·3 minutes peruse
Are you looking for a wide range of exposure to the US stock market’s Large Cap Value segment? Consider the iShares MSCI USA Value Factor ETF (VLUE), an exchange-traded fund that was introduced on April 16, 2013, and is passively managed.
Blackrock is the sponsor of the fund. With assets of more than $7.02 billion, it is one of the bigger exchange-traded funds (ETFs) that aims to replicate the US stock market’s Large Cap Value category.
Market capitalizations of large cap firms often exceed $10 billion. Compared to mid- and small-cap enterprises, they are often less volatile and are more stable businesses with predictable cash flows.
Investors should take note of value stocks’ lower-than-average rates of sales and profits growth in addition to their lower-than-average price-to-book and price-to-earnings ratios. Value stocks have historically outperformed growth companies when looking at long-term performance, but in strong bull markets, they are more likely to underperform growth stocks.
ETFs reduce the risk associated with single stocks by providing diversified exposure, but it’s still crucial to consider a fund’s holdings before making an investment. Fortunately, the majority of ETFs are extremely open offerings, revealing their holdings every day.
About 30.30% of the portfolio of this ETF is allocated to the information technology sector, which is the largest percentage. Healthcare and Finances complete the top three.
When examining individual holdings, the largest share of total assets is held by Intel Corporation Corp (INTC), which is followed by At&t Inc (T) and Cisco Systems Inc (CSCO).
Approximately 34.52% of the total assets under management are comprised of the top 10 holdings.
Before fees and costs, VLUE aims to replicate the performance of the MSCI USA Enhanced Value Index. The MSCI USA Enhanced Value Index is derived from the MSCI USA Index, a market capitalization-weighted parent index including big and mid-cap equities in the United States.
As of January 1, 2024, the ETF had gained almost 13.83% in the previous year and has gained roughly 13.94% thus far this year. It has fluctuated in value between $85.95 and $101.55 during the last 52 weeks.
The ETF is a medium risk option in the market with a beta of 1.05 and a standard deviation of 18.05% for the trailing three-year period. With over 152 positions, it successfully spreads out the risk associated with the firm.
Based on many aspects such as expense ratio, momentum, and predicted asset class return, Zacks ETF Rank of 1 (Strong Buy) is assigned to the IShares MSCI USA Value Factor ETF. For investors looking to gain exposure to the Style Box – Large Cap Value market category, VLUE is a great choice because of this. Investors may also want to look at some of the other ETFs available in this market.
Both the Vanguard Value ETF (VTV) and the iShares Russell 1000 Value ETF (IWD) follow the same index. Vanguard Value ETF has $105.40 billion in assets, compared to $55.28 billion for iShares Russell 1000 Value ETF. The expenditure ratio for IWD is 0.19%, whereas VTV charges 0.04%.
Passively managed exchange-traded funds (ETFs) are gaining traction among institutional and retail investors alike because of their affordability, transparency, adaptability, and tax efficiency. These are great investments for the long run.
Please visit Zacks ETF Centre to find out more about this product and other ETFs, search for products that align with your investing goals, and read articles on the most recent advancements in the world of ETF investing.