Yahoo Finance Should iShares MSCI USA Value Factor ETF (VLUE) Be on Your Investing Radar?
Launched on 04/16/2013, the iShares MSCI USA Value Factor ETF (VLUE) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $6.39 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
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.
Annual operating expenses for this ETF are 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 3.32%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 25.40% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, At&t Inc (T) accounts for about 5.34% of total assets, followed by Intel Corporation Corp (INTC) and Cisco Systems Inc (CSCO).
The top 10 holdings account for about 32.38% of total assets under management.
Performance and Risk
VLUE seeks to match the performance of the MSCI USA Enhanced Value Index before fees and expenses. 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.
The ETF has lost about -1.37% so far this year and is down about -8.96% in the last one year (as of 05/29/2023). In the past 52-week period, it has traded between $81.86 and $103.02.
The ETF has a beta of 1.04 and standard deviation of 20.07% for the trailing three-year period, making it a medium risk choice in the space. With about 151 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Value Factor ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VLUE is a great option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $48.52 billion in assets, Vanguard Value ETF has $98.85 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
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
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
