The iShares MSCI USA Value Factor ETF (VLUE) was launched on 04/16/2013, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Blackrock. VLUE has been able to amass assets over $9.46 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the MSCI USA Enhanced Value Index.
The MSCI USA Enhanced Value Index is based on a traditional market capitalization-weighted parent index, the MSCI USA Index which includes U.S. large and mid capitalization stocks.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.15%.
The fund has a 12-month trailing dividend yield of 1.43%.
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.
Representing 49.6% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Healthcare round out the top three.
Taking into account individual holdings, Micron Technology Inc (MU) accounts for about 14.28% of the fund's total assets, followed by Intel Corporation Corp (INTC) and Cisco Systems Inc (CSCO).
VLUE's top 10 holdings account for about 45.82% of its total assets under management.
Performance and Risk
The ETF has added roughly 43.95% and it's up approximately 72.64% so far this year and in the past one year (as of 07/23/2026), respectively. VLUE has traded between $111.55 and $204.59 during this last 52-week period.
The fund has a beta of 1.05 and standard deviation of 17.17% for the trailing three-year period, which makes VLUE a medium risk choice in this particular space. With about 152 holdings, it effectively diversifies company-specific risk .
Alternatives
iShares MSCI USA Value Factor ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
Schwab U.S. Dividend Equity ETF (SCHD) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value Index Fund ETF Shares (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $100.78 billion in assets, Vanguard Value Index Fund ETF Shares has $187.28 billion. SCHD has an expense ratio of 0.06% and VTV changes 0.03%.
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 - Large Cap Value
Bottom Line
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iShares MSCI USA Value Factor ETF (VLUE): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).