The iShares Russell 1000 Value ETF (IWD) was launched on 05/22/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $49.94 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. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
While 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. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 2.20%.
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.
This ETF has heaviest allocation to the Financials sector--about 20.20% 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 3.04% of total assets, followed by Johnson & Johnson (JNJ) and Exxon Mobil Corp (XOM).
Performance and Risk
IWD seeks to match the performance of the Russell 1000 Value Index before fees and expenses. The Russell 1000 Value Index measures the performance of the large-capitalization value sector of the U.S. equity market.
The ETF has lost about -0.32% so far this year and is down about -8.75% in the last one year (as of 03/31/2023). In the past 52-week period, it has traded between $135.99 and $168.41.
The ETF has a beta of 0.96 and standard deviation of 19.31% for the trailing three-year period, making it a medium risk choice in the space. With about 858 holdings, it effectively diversifies company-specific risk.