LRGF: A Strong Multifactor ETF, But Its Advantages Over IVV Are Limited

The iShares U.S. Equity Factor ETF (LRGF) maintains a "buy" rating, though a closer read of its strategy and fundamentals indicates investors should not expect much performance differences with IVV. A 1% tracking error with the STOXX USA 900 Index is LRGF's goal, suggesting that its emphasis of the momentum, value, quality, size, and low volatility factors may be limited. I confirmed as much using fundamental analysis. LRGF and IVV overlap by 68%, and although a small value advantage might exist, it's offset by slight concerns on quality and growth.