The iShares MSCI USA Value Factor ETF (VLUE) offers a low-cost option for investors seeking large-cap value exposure in the U.S. market
So, what’s the deal with large-cap value stocks? Well, these companies usually have market caps over $10 billion. They’re generally stable and have predictable cash flows, which makes them less volatile compared to smaller companies. Value stocks, on the other hand, are known for having lower price-to-earnings and price-to-book ratios. Just keep in mind that they might not grow as fast as growth stocks, especially in booming markets.
When picking an ETF, costs matter. VLUE has annual operating expenses of just 0.15%, which is pretty low. Plus, it offers a 12-month trailing dividend yield of 2.74%.
Now, let’s talk about where your money is going. This ETF has a big chunk—about 32.20%—in the Information Technology sector, with Financials and Healthcare following closely. Cisco Systems is a major holding, making up about 5.91% of the total assets, along with AT&T and Intel. The top 10 holdings account for around 33.43% of the total assets.
In terms of performance, VLUE aims to match the MSCI USA Enhanced Value Index. So far this year, it’s down about -0.56%, but it’s up around 7.54% over the last year. It’s traded between $98.17 and $115.38 in the past 52 weeks. With a beta of 1.02, it’s considered a medium-risk option, and it has about 153 holdings to help spread out the risk.
If you’re looking for alternatives, VLUE has a Zacks ETF Rank of 2, which is a “Buy.” Other options include the Schwab U.S. Dividend Equity ETF and the Vanguard Value ETF, both of which track similar indices but have different expense ratios.
In a nutshell, more and more investors are leaning towards passively managed ETFs like VLUE because they’re cost-effective, transparent, and flexible. They’re great for long-term investing. If you want to dive deeper into this ETF or others, check out Zacks ETF Center for more info.
