Designed to provide broad exposure to the Style Box - All Cap Value category of the market, the iShares U.S. Equity Factor ETF (LRGF) is a smart beta exchange traded fund launched on 04/28/2015.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
LRGF is managed by Blackrock, and this fund has amassed over $3.17 billion, which makes it one of the largest ETFs in the Style Box - All Cap Value. LRGF seeks to match the performance of the MSCI USA Diversified Multiple-Factor Index before fees and expenses.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.08%.
It's 12-month trailing dividend yield comes in at 1.15%.
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.
LRGF's heaviest allocation is in the Information Technology sector, which is about 33.6% of the portfolio. Its Financials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Nvidia Corp (NVDA) accounts for about 7.35% of the fund's total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).
Its top 10 holdings account for approximately 34.12% of LRGF's total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Equity Factor ETF return is roughly 0.56% so far, and it's up approximately 12.08% over the last 12 months (as of 02/11/2026). LRGF has traded between $51.37 $70.85 in this past 52-week period.
LRGF has a beta of 0.99 and standard deviation of 15.05% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 303 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 $8.74 billion in assets, iShares Core S&P U.S. Value ETF has $24.87 billion. FDVV has an expense ratio of 0.15% 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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