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Should iShares MSCI USA Min Vol Factor ETF (USMV) Be on Your Investing Radar?
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Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the iShares MSCI USA Min Vol Factor ETF (USMV - Free Report) , a passively managed exchange traded fund launched on 10/18/2011.
The fund is sponsored by Blackrock. It has amassed assets over $28.25 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
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 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.71%.
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 to the Healthcare sector--about 20% of the portfolio. Information Technology and Consumer Staples round out the top three.
Looking at individual holdings, Duke Energy Corp (DUK - Free Report) accounts for about 1.62% of total assets, followed by Merck & Co Inc (MRK - Free Report) and Verizon Communications Inc (VZ - Free Report) .
The top 10 holdings account for about 12.36% of total assets under management.
Performance and Risk
USMV seeks to match the performance of the MSCI USA Minimum Volatility Index before fees and expenses. The MSCI USA Minimum Volatility (USD) Index is composed of U.S. equities that, in the aggregate, have lower volatility characteristics relative to the broader U.S. equity market.
The ETF has lost about -0.24% so far this year and is down about -6.96% in the last one year (as of 03/30/2023). In the past 52-week period, it has traded between $65.75 and $79.10.
The ETF has a beta of 0.75 and standard deviation of 16.26% for the trailing three-year period, making it a medium risk choice in the space. With about 170 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Min Vol 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, USMV is an outstanding option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Core S&P 500 ETF (IVV - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $300.84 billion in assets, SPDR S&P 500 ETF has $364.14 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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 Min Vol Factor ETF (USMV) Be on Your Investing Radar?
Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the iShares MSCI USA Min Vol Factor ETF (USMV - Free Report) , a passively managed exchange traded fund launched on 10/18/2011.
The fund is sponsored by Blackrock. It has amassed assets over $28.25 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
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 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.71%.
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 to the Healthcare sector--about 20% of the portfolio. Information Technology and Consumer Staples round out the top three.
Looking at individual holdings, Duke Energy Corp (DUK - Free Report) accounts for about 1.62% of total assets, followed by Merck & Co Inc (MRK - Free Report) and Verizon Communications Inc (VZ - Free Report) .
The top 10 holdings account for about 12.36% of total assets under management.
Performance and Risk
USMV seeks to match the performance of the MSCI USA Minimum Volatility Index before fees and expenses. The MSCI USA Minimum Volatility (USD) Index is composed of U.S. equities that, in the aggregate, have lower volatility characteristics relative to the broader U.S. equity market.
The ETF has lost about -0.24% so far this year and is down about -6.96% in the last one year (as of 03/30/2023). In the past 52-week period, it has traded between $65.75 and $79.10.
The ETF has a beta of 0.75 and standard deviation of 16.26% for the trailing three-year period, making it a medium risk choice in the space. With about 170 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Min Vol 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, USMV is an outstanding option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Core S&P 500 ETF (IVV - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $300.84 billion in assets, SPDR S&P 500 ETF has $364.14 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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.