IWD

IWD: Low Growth Is Not Necessarily Value – Also For Large Caps
March 27, 2023

Summary

• There are countless methods and nuances of (systematic) value investing, but the general idea remains “cheap beats expensive”. Not always, but on average over the long run.
• The iShares Russell 1000 Value ETF tracks the Russell 1000 Value Index and offers a simple, transparent, and cheap implementation of the value premium for US large caps.
• The Russell value process unfortunately equates “low sales growth” with “value” which contradicts with the best practices discussed in the literature on the value factor.
• Despite decent performance when compared to an investable value peer-group, IWD is therefore not my preferred value implementation.