Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the iShares S&P 500 Value ETF (IVE) is a passively managed exchange traded fund launched on 05/22/2000.
The fund is sponsored by Blackrock. It has amassed assets over $24.05 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
Companies that find themselves in the large cap category 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 have lower than average price-to-earnings and price-to-book ratios. They also have 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.
When considering an ETF’s total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 1.97%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund’s holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Healthcare sector–about 16.70% of the portfolio. Financials and Industrials round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc Class B (BRK.B) accounts for about 3.13% of total assets, followed by Johnson & Johnson (JNJ) and Procter & Gamble (PG).
The top 10 holdings account for about 17.48% of total assets under management.
Performance and Risk
IVE seeks to match the performance of the S&P 500 Value Index before fees and expenses. The S&P 500 Value Index measures the performance of the large capitalization value sector of the U.S. equity market. It is a subset of the S&P 500 and consists of those stocks in the S&P 500 exhibiting the strongest value characteristics.
The ETF has lost about -7.73% so far this year and is down about -2.16% in the last one year (as of 05/11/2022). In the past 52-week period, it has traded between $143.60 and $159.06.
The ETF has a beta of 0.94 and standard deviation of 23.28% for the trailing three-year period, making it a medium risk choice in the space. With about 453 holdings, it effectively diversifies company-specific risk.
IShares S&P 500 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, IVE is a great 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 iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $52.45 billion in assets, Vanguard Value ETF has $96.34 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
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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iShares S&P 500 Value ETF (IVE): ETF Research Reports
Johnson & Johnson (JNJ) : Free Stock Analysis Report
Procter & Gamble Company The (PG) : Free Stock Analysis Report
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
Vanguard Value ETF (VTV): ETF Research Reports
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
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