Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider the WisdomTree U.S. LargeCap ETF (EPS – Free Report) , a passively managed exchange traded fund launched on 02/23/2007.
The fund is sponsored by Wisdomtree. It has amassed assets over $1.06 billion, 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
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
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. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.46%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund’s holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector–about 27.40% of the portfolio. Financials and Telecom round out the top three.
Looking at individual holdings, Apple Inc (AAPL – Free Report) accounts for about 5.32% of total assets, followed by Microsoft Corp (MSFT – Free Report) and Alphabet Inc-Cl A (GOOGL – Free Report) .
The top 10 holdings account for about 34.43% of total assets under management.
Performance and Risk
EPS seeks to match the performance of the WisdomTree U.S. Earnings 500 Index before fees and expenses. The WisdomTree U.S. LargeCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the large-capitalization segment of the U.S. Stock Market.
The ETF has added about 0.98% so far this year and is up about 26.18% in the last one year (as of 01/06/2025). In the past 52-week period, it has traded between $49.69 and $63.93.
The ETF has a beta of 0.99 and standard deviation of 16.52% for the trailing three-year period, making it a medium risk choice in the space. With about 502 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. LargeCap 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, EPS is a good option for those seeking exposure to the Style Box – Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The Schwab U.S. Dividend Equity ETF (SCHD – Free Report) and the Vanguard Value ETF (VTV – Free Report) track a similar index. While Schwab U.S. Dividend Equity ETF has $65.86 billion in assets, Vanguard Value ETF has $127.22 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
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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