Should the iShares S&P 500 Value ETF (IVE) Be on Your Investment Radar?

If you’re interested in broad exposure to the Large Cap Value sector of the US market, look no further than the iShares S&P 500 Value ETF (IVE), an exchange-traded fund launched on 05/22/2000.

The fund is supported by Blackrock. It has accumulated assets of more than $35.20 billion, making it one of the largest ETFs to attempt to measure the Large Cap Value segment of the US equity market.

Why Big Cap Value

Large cap companies typically have a market capitalization of more than $10 billion. They tend to be stable companies with predictable cash flows and are generally less stable than mid and small cap companies.

Value stocks with lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outpaced growth stocks in almost every market. They however may not be growth stocks in strong bull markets.

Funeral

Investors must also pay attention to the ETF’s expense ratio. Low cost products produce better results than high cost products, assuming all other metrics remain the same.

Annual fees for using this ETF are 0.18%, making it one of the cheapest products in the area.

It paid 12 %.

Sector Exposure and Top Holdings

Although ETFs provide diversified exposure, which mitigates the same risk, a thorough analysis of the fund’s portfolio is an important task. And, most ETFs are transparent assets that disclose their holdings on a daily basis.

This ETF is heavily weighted towards the Financials sector–about 23.30% of the portfolio. Healthcare and Industrials round out the top three.

Looking at individual holdings, Berkshire Hathaway Inc Class B (BRK.B) accounts for about 4.15% of total assets, followed by Jpmorgan Chase & Co (JPM) and Exxon Mobil Corp (XOM).

The top 10 account holders account for 19.68% of all assets under management.

Performance and Risk

IVE seeks to compare the performance of the S&P 500 Value Index before fees and expenses. The S&P 500 Value Index measures the performance of the largest capitalization value sector of the US equity market. It is part of the S&P 500 and consists of those stocks in the S&P 500 that show the strongest value trends.

The ETF has gained about 13.89% so far this year and is up about 29.87% in the last one year (as of 10/08/2024). Over the past 52-week period, it has traded between $147,600 and $195,000.

The ETF has a beta of 0.92 and a standard deviation of 14.77% for the next three-year period, making it a moderate risk option in the space. It has about 442 holdings, effectively diversifying the risk towards the company.

Other ways

The Shares S&P 500 Value ETF has a Zacks ETF Rank of 2 (Buy), which is based on the asset class’s expected return, price ratio, and momentum, among other factors. Because of this, IVE is the best choice for investors looking for exposure to the Style Box – Large Cap Value segment of the market. There are some additional ETFs in the space that investors may also consider.

The Schwab US Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV) track the same index. While the Schwab US Dividend Equity ETF has $61.71 billion in assets, the Vanguard Value ETF has $127.45 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.

Bottom-Line

Although the best vehicle for long-term investors, mutual funds ETFs are a popular choice among institutional and retail investors because of their affordability, transparency, flexibility, and tax efficiency.

To learn more about this product and other ETFs, screen products that suit your investment goals and read articles on the latest developments in the ETF investing universe, please visit the Zacks ETF Center.

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