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Should iShares MSCI USA Min Vol Factor ETF (USMV) Be on Your Investing Radar?
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If you're interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than 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 $25.22 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
Large cap companies usually 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 1.63%.
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 Information Technology sector--about 25.20% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, T Mobile Us Inc (TMUS - Free Report) accounts for about 1.66% of total assets, followed by Motorola Solutions Inc (MSI - Free Report) and International Business Machines Co (IBM - Free Report) .
The top 10 holdings account for about 15.5% 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 gained about 17.07% so far this year and is up roughly 22.55% in the last one year (as of 08/30/2024). In the past 52-week period, it has traded between $70.56 and $90.69.
The ETF has a beta of 0.76 and standard deviation of 13.09% for the trailing three-year period, making it a medium risk choice in the space. With about 175 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Min Vol Factor 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, USMV is a reasonable option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
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 $517.22 billion in assets, SPDR S&P 500 ETF has $565.09 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?
If you're interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than 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 $25.22 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
Large cap companies usually 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 1.63%.
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 Information Technology sector--about 25.20% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, T Mobile Us Inc (TMUS - Free Report) accounts for about 1.66% of total assets, followed by Motorola Solutions Inc (MSI - Free Report) and International Business Machines Co (IBM - Free Report) .
The top 10 holdings account for about 15.5% 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 gained about 17.07% so far this year and is up roughly 22.55% in the last one year (as of 08/30/2024). In the past 52-week period, it has traded between $70.56 and $90.69.
The ETF has a beta of 0.76 and standard deviation of 13.09% for the trailing three-year period, making it a medium risk choice in the space. With about 175 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Min Vol Factor 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, USMV is a reasonable option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
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 $517.22 billion in assets, SPDR S&P 500 ETF has $565.09 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.