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

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

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.

The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.

Fund Sponsor & Index

Because the fund has amassed over $17.81 billion, this makes it the largest ETF in the Style Box - All Cap Value. IUSV is managed by Blackrock. Before fees and expenses, IUSV seeks to match the performance of the S&P 900 Value Index.

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.

Annual operating expenses for this ETF are 0.04%, making it one of the least expensive products in the space.

It's 12-month trailing dividend yield comes in at 1.93%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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 22.70% 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 3.58% of total assets, followed by Jpmorgan Chase & Co- (JPM - Free Report) and Exxon Mobil Corp- (XOM - Free Report) .

The top 10 holdings account for about 18.21% of total assets under management.

Performance and Risk

Year-to-date, the iShares Core S&P U.S. Value ETF has added roughly 6.39% so far, and was up about 13.91% over the last 12 months (as of 08/07/2024). IUSV has traded between $71.48 and $92.41 in this past 52-week period.

IUSV has a beta of 0.94 and standard deviation of 15.02% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 737 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 - Free Report) tracks ---------------------------------------- and the Dimensional U.S. Targeted Value ETF (DFAT - Free Report) tracks ----------------------------------------. Capital Group Dividend Value ETF has $9.33 billion in assets, Dimensional U.S. Targeted Value ETF has $9.84 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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