Six of VLUE’s top-10 holdings are Dow components, but more is how the ETF captures the value theme. That starts with a 22% weight to the financial services sector. Wells Fargo (NYSE: WFC) is trading at 13 times earnings while JPMorgan (NYSE: JPM) is hovering around 15 times, whereas the S&P 500 index is trading at about 17 times earnings. Both banking giants are top-10 holdings in VLUE.
Still, VLUE’s efforts to deliver value do not mean the ETF will always be discounted relative to broader benchmarks. At the end of the third quarter, VLUE’s P/E was nearly 20. However, the ETF does blend value along with elements of quality and volatility-damping. The ETF’s standard deviation t the end of the third quarter was just 9.1%, according to issuer data.
Additionally, 17 of the ETF’s top-20 holdings have been recent dividend raisers and of those 17, eight have dividend increase streaks that can be measured in decades.
iShares MSCI USA Value ETF