Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the iShares Morningstar Large-Cap Value ETF (JKF) is a passively managed exchange traded fund launched on 06/28/2004.
The fund is sponsored by Blackrock. It has amassed assets over $398.55 M, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.25%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.55%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 26.10% of the portfolio. Consumer Staples and Healthcare round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc Class B (BRK.B) accounts for about 6.13% of total assets, followed by Jpmorgan Chase & Co (JPM) and Exxon Mobil Corp (XOM).
The top 10 holdings account for about 41.33% of total assets under management.
Performance and Risk
JKF seeks to match the performance of the Morningstar Large Value Index before fees and expenses. The Morningstar Large Value Index measures the performance of stocks issued by large-capitalization comp that have exhibited value characteristics.
The ETF has gained about 2.52% so far this year and it's up approximately 7.99% in the last one year (as of 11/12/2018). In the past 52-week period, it has traded between $98.79 and $112.57.
The ETF has a beta of 0.88 and standard deviation of 12.06% for the trailing three-year period, making it a medium risk choice in the space. With about 77 holdings, it effectively diversifies company-specific risk.
IShares Morningstar Large-Cap Value ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, JKF is a reasonable option for those seeking exposure to the Large Cap ETFs area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $38.01 B in assets, Vanguard Value ETF has $43.85 B. IWD has an expense ratio of 0.20% and VTV charges 0.05%.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
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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ISHARS-MO LC VL (JKF): ETF Research Reports
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
VIPERS-VALUE (VTV): ETF Research Reports
ISHARS-RS 1K VL (IWD): ETF Research Reports
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
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