USMV vs. VLUE: What’s The Difference?

The iShares MSCI USA Min Vol Factor ETF (USMV) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. USMV is a iShares Large Blend fund and VLUE is a iShares Large Value fund. So, what’s the difference between USMV and VLUE? And which fund is better?

USMV and VLUE have the same expense ratio: 0.15%. USMV also has a lower exposure to the technology sector and a lower standard deviation. Overall, USMV has provided higher returns than VLUE over the past 7 years.

In this article, we’ll compare USMV vs. VLUE. We’ll look at holdings and fund composition, as well as at their annual returns and performance. Moreover, I’ll also discuss USMV’s and VLUE’s risk metrics, portfolio growth, and industry exposure and examine how these affect their overall returns.

Summary

USMV VLUE
Name iShares MSCI USA Min Vol Factor ETF iShares MSCI USA Value Factor ETF
Category Large Blend Large Value
Issuer iShares iShares
AUM 27.6B 15.95B
Avg. Return 13.89% 8.91%
Div. Yield 1.5% 1.89%
Expense Ratio 0.15% 0.15%

The iShares MSCI USA Min Vol Factor ETF (USMV) is a Large Blend fund that is issued by iShares. It currently has 27.6B total assets under management and has yielded an average annual return of 13.89% over the past 10 years. The fund has a dividend yield of 1.5% with an expense ratio of 0.15%.

The iShares MSCI USA Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.

USMV’s dividend yield is 0.39% lower than that of VLUE (1.5% vs. 1.89%). Also, USMV yielded on average 4.98% more per year over the past decade (13.89% vs. 8.91%). USMV and VLUE have the same expense ratio: 0.15%.

Fund Composition

Industry Exposure

USMV vs. VLUE - Industry Exposure

USMV VLUE
Technology 20.53% 26.89%
Industrials 10.51% 9.14%
Energy 0.21% 2.42%
Communication Services 11.03% 10.39%
Utilities 6.93% 2.68%
Healthcare 18.42% 14.31%
Consumer Defensive 12.82% 7.22%
Real Estate 2.73% 3.19%
Financial Services 9.65% 10.96%
Consumer Cyclical 5.53% 10.66%
Basic Materials 1.65% 2.14%

The iShares MSCI USA Min Vol Factor ETF (USMV) has the most exposure to the Technology sector at 20.53%. This is followed by Healthcare and Consumer Defensive at 18.42% and 12.82% respectively. Basic Materials (1.65%), Real Estate (2.73%), and Consumer Cyclical (5.53%) only make up 9.91% of the fund’s total assets.

USMV’s mid-section with moderate exposure is comprised of Utilities, Financial Services, Industrials, Communication Services, and Consumer Defensive stocks at 6.93%, 9.65%, 10.51%, 11.03%, and 12.82%.

The iShares MSCI USA Value Factor ETF (VLUE) has the most exposure to the Technology sector at 26.89%. This is followed by Healthcare and Financial Services at 14.31% and 10.96% respectively. Energy (2.42%), Utilities (2.68%), and Real Estate (3.19%) only make up 8.29% of the fund’s total assets.

VLUE’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Financial Services stocks at 7.22%, 9.14%, 10.39%, 10.66%, and 10.96%.

USMV is 6.36% less exposed to the Technology sector than VLUE (20.53% vs 26.89%). USMV’s exposure to Healthcare and Consumer Defensive stocks is 4.11% higher and 5.60% higher respectively (18.42% vs. 14.31% and 12.82% vs. 7.22%). In total, Basic Materials, Real Estate, and Consumer Cyclical also make up 6.08% less of the fund’s holdings compared to VLUE (9.91% vs. 15.99%).

Holdings

USMV - Holdings

USMV Holdings Weight
Eli Lilly and Co 1.64%
Microsoft Corp 1.62%
T-Mobile US Inc 1.51%
Accenture PLC Class A 1.51%
Visa Inc Class A 1.49%
Waste Management Inc 1.45%
Adobe Inc 1.45%
The Kroger Co 1.44%
Johnson & Johnson 1.42%
Gilead Sciences Inc 1.42%

USMV’s Top Holdings are Eli Lilly and Co, Microsoft Corp, T-Mobile US Inc, Accenture PLC Class A, and Visa Inc Class A at 1.64%, 1.62%, 1.51%, 1.51%, and 1.49%.

Waste Management Inc (1.45%), Adobe Inc (1.45%), and The Kroger Co (1.44%) have a slightly smaller but still significant weight. Johnson & Johnson and Gilead Sciences Inc are also represented in the USMV’s holdings at 1.42% and 1.42%.

VLUE - Holdings

VLUE Holdings Weight
AT&T Inc 7.13%
Intel Corp 6.14%
General Motors Co 3.19%
Micron Technology Inc 3.14%
Cisco Systems Inc 3.05%
International Business Machines Corp 2.76%
Target Corp 2.38%
Citigroup Inc 2.32%
Ford Motor Co 2.23%
Pfizer Inc 2.17%

VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.

International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.

Risk Analysis

USMV VLUE
Mean Return 0 0
R-squared 0 0
Std. Deviation 0 0
Alpha 0 0
Beta 0 0
Sharpe Ratio 0 0
Treynor Ratio 0 0

The iShares MSCI USA Min Vol Factor ETF (USMV) has a Mean Return of 0 with a Treynor Ratio of 0 and a Sharpe Ratio of 0. Its Standard Deviation is 0 while USMV’s Beta is 0. Furthermore, the fund has a Alpha of 0 and a R-squared of 0.

The iShares MSCI USA Value Factor ETF (VLUE) has a Standard Deviation of 0 with a Alpha of 0 and a Mean Return of 0. Its Treynor Ratio is 0 while VLUE’s R-squared is 0. Furthermore, the fund has a Beta of 0 and a Sharpe Ratio of 0.

USMV’s Mean Return is 0.00 points lower than that of VLUE and its R-squared is 0.00 points lower. With a Standard Deviation of 0, USMV is slightly less volatile than VLUE. The Alpha and Beta of USMV are 0.00 points lower and 0.00 points lower than VLUE’s Alpha and Beta.

Performance

Annual Returns

USMV vs. VLUE - Annual Returns

Year USMV VLUE
2020 5.6% -0.32%
2019 27.77% 27.47%
2018 1.36% -11.18%
2017 18.97% 21.97%
2016 10.5% 15.68%
2015 5.5% -3.54%
2014 16.34% 12.29%
2013 25.11% 0.0%
2012 11.04% 0.0%
2011 0.0% 0.0%
2010 0.0% 0.0%

USMV had its best year in 2019 with an annual return of 27.77%. USMV’s worst year over the past decade yielded 0.0% and occurred in 2011. In most years the iShares MSCI USA Min Vol Factor ETF provided moderate returns such as in 2020, 2016, and 2012 where annual returns amounted to 5.6%, 10.5%, and 11.04% respectively.

The year 2019 was the strongest year for VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

USMV vs. VLUE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
USMV $10,000 $22,066 13.89%
VLUE $10,000 $17,247 8.91%

A $10,000 investment in USMV would have resulted in a final balance of $22,066. This is a profit of $12,066 over 7 years and amounts to a compound annual growth rate (CAGR) of 13.89%.

With a $10,000 investment in VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.

USMV’s CAGR is 4.98 percentage points higher than that of VLUE and as a result, would have yielded $4,819 more on a $10,000 investment. Thus, USMV outperformed VLUE by 4.98% annually.


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