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The iShares Russell 1000 Value ETF (IWD) is a popular investment choice for those seeking a diversified portfolio of large- and mid-cap value stocks. Over the past decade, the ETF has demonstrated mixed performance trends compared to some peers, with an annualized return of approximately 8.82%.
Despite this slightly underperforming return compared to the iShares Russell Midcap ETF (IWR), both ETFs have similar expense ratios of 0.19%, reflecting cost efficiency. During the global financial crisis around 2008, IWD experienced a significant drawdown of about -60.1%, slightly worse than IWR's -58.8%.
The ETF replicates the Russell 1000 Value Index, which selects the largest 1,000 stocks, roughly 93% of the investable US stock market, and weights them by market cap. This market-cap-weighting strategy harnesses the market's collective view of each stock's relative value and typically requires lower turnover, reducing transaction costs.
The largest sector in the fund is financial services, holding stocks like Berkshire Hathaway BRK.B and JPMorgan Chase JPM. Despite its broader reach, the fund's average market cap is lower than the category average because it holds more mid-cap stocks than its average peer. This broader reach helps to mitigate risk by favoring larger, more stable stocks.
The fund is less concentrated, with 17% of its assets in its top 10 holdings, which is 12 percentage points less than the category average. This diversification strategy can help reduce the impact of any single stock's performance on the overall portfolio.
The iShares Russell 1000 Value ETF closely tracks its average peer in terms of sector allocations, with no sector deviating by more than 3 percentage points as of June 2025, and none by more than 5 percentage points in the decade leading up to 2025.
The fund's turnover is a fraction of the average fund's in the large-value Morningstar Category, which can help reduce transaction costs and taxes. As of June 2025, the fund held around 870 stocks, nearly triple the amount that its average peer holds.
The ETF's performance tends to follow the category, although it slightly underperformed recently. However, its value characteristics, such as price/earnings and dividend yield, closely track the category average. Despite the slightly higher volatility, the fund has clocked higher risk-adjusted returns.
The iShares Russell 1000 Value ETF outpaced the large-value category by 54 basis points annualized from its inception in 2000 through June 2025. The ETF has received a Silver Morningstar Medalist Rating, indicating its strong risk-adjusted performance.
In summary, the iShares Russell 1000 Value ETF offers a diversified pool of large- and mid-cap value stocks with a competitive expense ratio and lower turnover. While it may experience steeper drawdowns and underperformance in growth-led markets or during systemic shocks, its risk-adjusted returns and long-term performance make it an attractive choice for many investors.
[1] Source: Morningstar Inc. [2] Source: Vanguard Investments [3] Source: Russell Investments
- Investing in the iShares Russell 1000 Value ETF exposes one to a diversified portfolio of large- and mid-cap value stocks, particularly in sectors like finance, with companies such as Berkshire Hathaway (BRK.B) and JPMorgan Chase (JPM), while also incorporating technology stocks.
- Although the iShares Russell 1000 Value ETF may underperform in growth-led markets or during systemic shocks, its lower turnover, risk-adjusted returns, and long-term performance, as well as its Silver Morningstar Medalist Rating, make it an attractive choice for tech-savvy, financially-minded investors seeking value stocks.
