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Should iShares MSCI USA Multifactor ETF (LRGF) Be on Your Investing Radar?
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If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the iShares MSCI USA Multifactor ETF (LRGF - Free Report) , a passively managed exchange traded fund launched on 04/28/2015.
The fund is sponsored by Blackrock. It has amassed assets over $1.15 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies usually 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.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
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 this ETF are 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.33%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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 28.40% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 4.49% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Cisco Systems Inc (CSCO - Free Report) .
The top 10 holdings account for about 25.58% of total assets under management.
Performance and Risk
LRGF seeks to match the performance of the MSCI USA Diversified Multiple-Factor Index before fees and expenses. The MSCI USA Diversified Multiple-Factor Index is composed of U.S. large and mid-capitalization stocks that have favorable exposure to target style factors subject to constraints.
The ETF has lost about -9.76% so far this year and is down about -0.48% in the last one year (as of 05/30/2022). In the past 52-week period, it has traded between $39.19 and $46.80.
The ETF has a beta of 0.97 and standard deviation of 23.95% for the trailing three-year period, making it a medium risk choice in the space. With about 165 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Multifactor ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, LRGF is a sufficient option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $56.20 billion in assets, Vanguard Value ETF has $101.49 billion. IWD has an expense ratio of 0.19% 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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Should iShares MSCI USA Multifactor ETF (LRGF) Be on Your Investing Radar?
If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the iShares MSCI USA Multifactor ETF (LRGF - Free Report) , a passively managed exchange traded fund launched on 04/28/2015.
The fund is sponsored by Blackrock. It has amassed assets over $1.15 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies usually 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.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
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 this ETF are 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.33%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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 28.40% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 4.49% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Cisco Systems Inc (CSCO - Free Report) .
The top 10 holdings account for about 25.58% of total assets under management.
Performance and Risk
LRGF seeks to match the performance of the MSCI USA Diversified Multiple-Factor Index before fees and expenses. The MSCI USA Diversified Multiple-Factor Index is composed of U.S. large and mid-capitalization stocks that have favorable exposure to target style factors subject to constraints.
The ETF has lost about -9.76% so far this year and is down about -0.48% in the last one year (as of 05/30/2022). In the past 52-week period, it has traded between $39.19 and $46.80.
The ETF has a beta of 0.97 and standard deviation of 23.95% for the trailing three-year period, making it a medium risk choice in the space. With about 165 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Multifactor ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, LRGF is a sufficient option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $56.20 billion in assets, Vanguard Value ETF has $101.49 billion. IWD has an expense ratio of 0.19% 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.