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Should iShares Russell 1000 Value ETF (IWD) Be on Your Investing Radar?
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Launched on 05/22/2000, the iShares Russell 1000 Value ETF (IWD - Free Report) 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 $54.29 billion, making it one of the largest 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. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.18%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.05%.
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 Financials sector--about 20.30% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc Class B (BRK.B - Free Report) accounts for about 3.04% of total assets, followed by Johnson & Johnson (JNJ - Free Report) and Exxon Mobil Corp (XOM - Free Report) .
Performance and Risk
IWD seeks to match the performance of the Russell 1000 Value Index before fees and expenses. The Russell 1000 Value Index measures the performance of the large-capitalization value sector of the U.S. equity market.
The ETF has added about 4.81% so far this year and is up roughly 1.21% in the last one year (as of 01/27/2023). In the past 52-week period, it has traded between $135.99 and $168.89.
The ETF has a beta of 0.95 and standard deviation of 25.18% for the trailing three-year period, making it a medium risk choice in the space. With about 858 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Russell 1000 Value ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IWD is an excellent 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 Vanguard High Dividend Yield ETF (VYM - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While Vanguard High Dividend Yield ETF has $51.35 billion in assets, Vanguard Value ETF has $101.88 billion. VYM has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 Russell 1000 Value ETF (IWD) Be on Your Investing Radar?
Launched on 05/22/2000, the iShares Russell 1000 Value ETF (IWD - Free Report) 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 $54.29 billion, making it one of the largest 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. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.18%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.05%.
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 Financials sector--about 20.30% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc Class B (BRK.B - Free Report) accounts for about 3.04% of total assets, followed by Johnson & Johnson (JNJ - Free Report) and Exxon Mobil Corp (XOM - Free Report) .
Performance and Risk
IWD seeks to match the performance of the Russell 1000 Value Index before fees and expenses. The Russell 1000 Value Index measures the performance of the large-capitalization value sector of the U.S. equity market.
The ETF has added about 4.81% so far this year and is up roughly 1.21% in the last one year (as of 01/27/2023). In the past 52-week period, it has traded between $135.99 and $168.89.
The ETF has a beta of 0.95 and standard deviation of 25.18% for the trailing three-year period, making it a medium risk choice in the space. With about 858 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Russell 1000 Value ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IWD is an excellent 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 Vanguard High Dividend Yield ETF (VYM - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While Vanguard High Dividend Yield ETF has $51.35 billion in assets, Vanguard Value ETF has $101.88 billion. VYM has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.