Is iShares Core S&P U.S. Value ETF (IUSV) a Strong ETF Right Now?

Making its debut on 07/24/2000, smart beta exchange traded fund iShares Core S&P U.S. Value ETF (IUSV) provides investors broad exposure to the Style Box - All 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.

But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

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

Because the fund has amassed over $17.36 billion, this makes it the largest ETF in the Style Box - All Cap Value. IUSV is managed by Blackrock. This particular fund seeks to match the performance of the S&P 900 Value Index before fees and expenses.

The S&P 900 Value Index measures the performance of the large and mid-capitalization value sector of the U.S. equity market.

Cost & Other Expenses

When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.

With one of the least expensive products in the space, this ETF has annual operating expenses of 0.04%.

It's 12-month trailing dividend yield comes in at 1.76%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Financials sector - about 23.10% of the portfolio. Healthcare and Industrials round out the top three.

Taking into account individual holdings, Berkshire Hathaway Inc Class B (BRK.B) accounts for about 3.60% of the fund's total assets, followed by Jpmorgan Chase & Co (JPM) and Exxon Mobil Corp (XOM).

The top 10 holdings account for about 17.54% of total assets under management.

Performance and Risk

The ETF has added roughly 6.31% so far this year and is up about 23.71% in the last one year (as of 06/03/2024). In the past 52-week period, it has traded between $71.48 and $90.44.

The ETF has a beta of 0.96 and standard deviation of 15.11% for the trailing three-year period, making it a medium risk choice in the space. With about 745 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares Core S&P U.S. Value ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.

Capital Group Dividend Value ETF (CGDV) tracks ---------------------------------------- and the Dimensional U.S. Targeted Value ETF (DFAT) tracks ----------------------------------------. Capital Group Dividend Value ETF has $8.16 billion in assets, Dimensional U.S. Targeted Value ETF has $10 billion. CGDV has an expense ratio of 0.33% and DFAT charges 0.28%.

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 - All 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 Core S&P U.S. Value ETF (IUSV): ETF Research Reports

JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report

Exxon Mobil Corporation (XOM) : Free Stock Analysis Report

Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report

Dimensional U.S. Targeted Value ETF (DFAT): ETF Research Reports

Capital Group Dividend Value ETF (CGDV): ETF Research Reports

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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