Should iShares MSCI USA Value Factor ETF (VLUE) Be on Your Investing Radar?

The iShares MSCI USA Value Factor ETF (VLUE) was launched on 04/16/2013, 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 $7.64 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.

Why Large Cap Value

Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows 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. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.

Costs

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.