IShares Russell 1000 Value ETF IWD constructs a well-diversified, market-cap-weighted basket of U.S. value stocks at a low cost. However, there are cheaper alternatives. It earns a Morningstar Analyst Rating of Silver.

The fund replicates the Russell 1000 Value Index, which selects cheaper large-cap stocks and weights them by market cap. These companies have modest valuations that reflect their dimmer growth outlook. However, performance relative to expectations is what counts, and these firms face a lower hurdle to deliver solid returns.

U.S. large-cap stocks attract liquidity and widespread attention, such that new information is quickly reflected in prices. Market-cap weighting is a sensible approach here. It harnesses the market’s collective wisdom of the relative value of each holding.
The fund accurately mimics the contours of its average peer, which emphasizes the fund’s low fee in driving peer-relative outperformance in the long run. The fund's sector allocations did not deviate from the Morningstar Category average by more than 3% as of March 2023. It also trades at a similar average valuation level as its typical peer. On the other hand, the fund has a lower average market cap than the category average because of its broad reach, which improves overall diversification.

The fund is well-diversified compared to its average category rival. The fund’s top 10 holdings represent only 18% of the portfolio, which is 13 percentage points lower than the category average. In addition, the fund includes blend stocks that can mitigate the fund’s value tilt and aid its performance when value stocks underperform.

Analyst Rating

Exposure to value, but there are cheaper alternatives.

Associate Analyst

Mo'ath Almahasneh

Berkshire Hathaway Inc. - Ordinary Shares - Class B

JPMorgan Chase & Co

Exxon Mobil

Johnson & Johnson

Procter & Gamble

Chevron

Merck

Walmart

Bank of America

Wells Fargo

The Russell 1000 Value Index constructs a market-cap-weighted portfolio that channels the market's collective wisdom and diversifies risk effectively. It earns an Above Average Process Pillar rating.

The Russell 1000 Value Index assigns each Russell 1000 Index constituent a style score based on its price/book ratio, I/B/E/S 2-year growth forecast, and five-year sales per share growth. The P/B ratio constitutes 50% of the composite style score, and the two growth metrics represent 25% apiece. Stocks in the cheapest quartile are fully allocated to the value index, while those in the most growth-oriented quartile are fully allocated to the Russell 1000 Growth Index. Stocks that fall in between are partially allocated to each index based on the strength of their value and growth characteristics. The index implements value-growth score buffers around its lower bound to limit turnover. The index is reconstituted annually.

Above Average

Process

BlackRock's industry-leading technology, global footprint, and extensive supporting cast earn an Above Average People Pillar rating. The team employs BlackRock's Aladdin platform to fulfill much of its portfolio management tasks, and global trading desks allow traders to conduct foreign transactions in a cost-effective way.

The iShares index equity team has endured some internal turnover at the top over the past few years. But index-tracking performance should remain tight, thanks to heavily automated processes, a large team of seasoned professionals, and several long-tenured managers who remain at the helm. Amy Whitelaw left the team in February 2023 for another role within the organization. Paul Whitehead replaced Alan Mason as a manager in January 2022, when Mason left to focus on the firm's customized institutional indexing capabilities. The broader index equity group, co-headed by Jennifer Hsui and Paul Whitehead, will continue to oversee iShares equity ETFs.

These managers interact with a wider team of traders and managers around the globe to execute the fund's day-to-day operations. The larger number of managers also limits the impact of personnel turnover when it does occur.

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

iShares Russell 1000 Value ETF

IWD tracks an index of US large- and mid-cap value stocks. The index selects from US stocks ranked 1-1,000 by market cap based on 3 style factors.

IWD tracks an index of US large- and mid-cap value stocks. The index selects from US stocks ranked 1-1,000 by market cap.

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