The iShares U.S. Equity Factor ETF (LRGF) made its debut on 04/28/2015, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Blackrock, LRGF has amassed assets over $2.69 billion, making it one of the largest ETFs in the Style Box - All Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the MSCI USA Diversified Multiple-Factor Index.
The STOXX U.S. Equity Factor Index composes of U.S. large and mid-capitalization stocks that have favourable exposure to target style factors subject to constraints.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.08% for this ETF, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.18%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 34.5% of the portfolio. Financials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Nvidia Corp (NVDA) accounts for about 6.85% of the fund's total assets, followed by Microsoft Corp (MSFT) and Apple Inc (AAPL).
Its top 10 holdings account for approximately 32.73% of LRGF's total assets under management.
Performance and Risk
So far this year, LRGF return is roughly 9.13%, and it's up approximately 21.66% in the last one year (as of 08/05/2025). During this past 52-week period, the fund has traded between $51.37 and $66.01.
LRGF has a beta of 0.96 and standard deviation of 17.10% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 289 holdings, it effectively diversifies company-specific risk .
Alternatives
iShares U.S. Equity Factor ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Fidelity High Dividend ETF (FDVV) tracks Fidelity Core Dividend Index and the iShares Core S&P U.S. Value ETF (IUSV) tracks S&P 900 Value Index. Fidelity High Dividend ETF has $6.17 billion in assets, iShares Core S&P U.S. Value ETF has $21 billion. FDVV has an expense ratio of 0.16% and IUSV changes 0.04%.
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 - All Cap Value
Bottom Line
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 U.S. Equity Factor ETF (LRGF): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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