The iShares MSCI USA Value Factor ETF (VLUE) and the iShares MSCI EAFE Value ETF (EFV) are both among the Top 100 ETFs. VLUE is a iShares Large Value fund and EFV is a iShares Foreign Large Value fund. So, what’s the difference between VLUE and EFV? And which fund is better?
The expense ratio of VLUE is 0.24 percentage points lower than EFV’s (0.15% vs. 0.39%). VLUE also has a higher exposure to the technology sector and a lower standard deviation. Overall, VLUE has provided higher returns than EFV over the past 7 years.
In this article, we’ll compare VLUE vs. EFV. We’ll look at performance and industry exposure, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss VLUE’s and EFV’s holdings, fund composition, and risk metrics and examine how these affect their overall returns.
Summary
| VLUE | EFV | |
| Name | iShares MSCI USA Value Factor ETF | iShares MSCI EAFE Value ETF |
| Category | Large Value | Foreign Large Value |
| Issuer | iShares | iShares |
| AUM | 15.95B | 14.37B |
| Avg. Return | 8.91% | 3.99% |
| Div. Yield | 1.89% | 2.94% |
| Expense Ratio | 0.15% | 0.39% |
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%.
The iShares MSCI EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.
VLUE’s dividend yield is 1.05% lower than that of EFV (1.89% vs. 2.94%). Also, VLUE yielded on average 4.92% more per year over the past decade (8.91% vs. 3.99%). The expense ratio of VLUE is 0.24 percentage points lower than EFV’s (0.15% vs. 0.39%).
Fund Composition
Industry Exposure
| VLUE | EFV | |
| Technology | 26.89% | 2.98% |
| Industrials | 9.14% | 11.6% |
| Energy | 2.42% | 6.6% |
| Communication Services | 10.39% | 6.46% |
| Utilities | 2.68% | 6.14% |
| Healthcare | 14.31% | 9.19% |
| Consumer Defensive | 7.22% | 6.82% |
| Real Estate | 3.19% | 5.06% |
| Financial Services | 10.96% | 26.55% |
| Consumer Cyclical | 10.66% | 9.0% |
| Basic Materials | 2.14% | 9.59% |
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%.
The iShares MSCI EAFE Value ETF (EFV) has the most exposure to the Financial Services sector at 26.55%. This is followed by Industrials and Basic Materials at 11.6% and 9.59% respectively. Real Estate (5.06%), Utilities (6.14%), and Communication Services (6.46%) only make up 17.66% of the fund’s total assets.
EFV’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Consumer Cyclical, Healthcare, and Basic Materials stocks at 6.6%, 6.82%, 9.0%, 9.19%, and 9.59%.
VLUE is 23.91% more exposed to the Technology sector than EFV (26.89% vs 2.98%). VLUE’s exposure to Healthcare and Financial Services stocks is 5.12% higher and 15.59% lower respectively (14.31% vs. 9.19% and 10.96% vs. 26.55%). In total, Energy, Utilities, and Real Estate also make up 9.51% less of the fund’s holdings compared to EFV (8.29% vs. 17.80%).
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%.
| EFV Holdings | Weight |
| Novartis AG | 2.41% |
| Toyota Motor Corp | 2.21% |
| Commonwealth Bank of Australia | 1.59% |
| Siemens AG | 1.45% |
| Sanofi SA | 1.42% |
| HSBC Holdings PLC | 1.4% |
| TotalEnergies SE | 1.35% |
| Allianz SE | 1.23% |
| GlaxoSmithKline PLC | 1.18% |
| Rio Tinto PLC | 1.1% |
EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.
HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.
Risk Analysis
| VLUE | EFV | |
| Mean Return | 0 | 0.42 |
| R-squared | 0 | 92.15 |
| Std. Deviation | 0 | 16.53 |
| Alpha | 0 | -1.77 |
| Beta | 0 | 1.05 |
| Sharpe Ratio | 0 | 0.26 |
| Treynor Ratio | 0 | 2.92 |
The iShares MSCI USA Value Factor ETF (VLUE) has a Mean Return of 0 with a Beta of 0 and a Alpha of 0. Its R-squared is 0 while VLUE’s Sharpe Ratio is 0. Furthermore, the fund has a Standard Deviation of 0 and a Treynor Ratio of 0.
The iShares MSCI EAFE Value ETF (EFV) has a R-squared of 92.15 with a Beta of 1.05 and a Sharpe Ratio of 0.26. Its Alpha is -1.77 while EFV’s Mean Return is 0.42. Furthermore, the fund has a Standard Deviation of 16.53 and a Treynor Ratio of 2.92.
VLUE’s Mean Return is 0.42 points lower than that of EFV and its R-squared is 92.15 points lower. With a Standard Deviation of 0, VLUE is slightly less volatile than EFV. The Alpha and Beta of VLUE are 1.77 points higher and 1.05 points lower than EFV’s Alpha and Beta.
Performance
Annual Returns
| Year | VLUE | EFV |
| 2020 | -0.32% | -2.78% |
| 2019 | 27.47% | 15.97% |
| 2018 | -11.18% | -14.88% |
| 2017 | 21.97% | 21.22% |
| 2016 | 15.68% | 4.87% |
| 2015 | -3.54% | -5.89% |
| 2014 | 12.29% | -5.65% |
| 2013 | 0.0% | 22.61% |
| 2012 | 0.0% | 17.52% |
| 2011 | 0.0% | -12.24% |
| 2010 | 0.0% | 3.18% |
VLUE had its best year in 2019 with an annual return of 27.47%. VLUE’s worst year over the past decade yielded -11.18% and occurred in 2018. In most years the iShares MSCI USA Value Factor ETF provided moderate returns such as in 2012, 2011, and 2010 where annual returns amounted to 0.0%, 0.0%, and 0.0% respectively.
The year 2013 was the strongest year for EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VLUE | $10,000 | $17,247 | 8.91% |
| EFV | $10,000 | $10,832 | 3.99% |
A $10,000 investment in VLUE would have resulted in a final balance of $17,247. This is a profit of $7,247 over 7 years and amounts to a compound annual growth rate (CAGR) of 8.91%.
With a $10,000 investment in EFV, the end total would have been $10,832. This equates to a $832 profit over 7 years and a compound annual growth rate (CAGR) of 3.99%.
VLUE’s CAGR is 4.92 percentage points higher than that of EFV and as a result, would have yielded $6,415 more on a $10,000 investment. Thus, VLUE outperformed EFV by 4.92% annually.
Current recommendations:
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.
I believe that money is just a means to an end: to be free to spend your time as you wish, to maximize your positive impact on the world.
