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Is IQ Chaikin U.S. Large Cap ETF (CLRG) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the IQ Chaikin U.S. Large Cap ETF is a smart beta exchange traded fund launched on 12/13/2017.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by New York Life Investments, CLRG has amassed assets over $284.45 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. CLRG seeks to match the performance of the NASDAQ CHAIKIN POWER US LARGE CAP INDEX before fees and expenses.
The NASDAQ Chaikin Power US Large Cap Index applies a quantitative multi-factor model that seeks to identify securities that are expected to outperform peers by selecting securities from the Nasdaq US 300 Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.39%.
Sector Exposure and Top Holdings
ETFs offer 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.
For CLRG, it has heaviest allocation in the Information Technology sector --about 25% of the portfolio --while Healthcare and Financials round out the top three.
Taking into account individual holdings, Eog Resources Inc (EOG - Free Report) accounts for about 1.52% of the fund's total assets, followed by Arista Networks Inc (ANET - Free Report) and Mckesson Corp (MCK - Free Report) .
The top 10 holdings account for about 13.49% of total assets under management.
Performance and Risk
The ETF has lost about -16.92% so far this year and is down about -9.43% in the last one year (as of 06/30/2022). In the past 52-week period, it has traded between $28.65 and $36.15.
The ETF has a beta of 1.07 and standard deviation of 24.81% for the trailing three-year period. With about 104 holdings, it effectively diversifies company-specific risk.
Alternatives
IQ Chaikin U.S. Large Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $280.64 billion in assets, SPDR S&P 500 ETF has $348.37 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
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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Is IQ Chaikin U.S. Large Cap ETF (CLRG) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the IQ Chaikin U.S. Large Cap ETF is a smart beta exchange traded fund launched on 12/13/2017.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by New York Life Investments, CLRG has amassed assets over $284.45 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. CLRG seeks to match the performance of the NASDAQ CHAIKIN POWER US LARGE CAP INDEX before fees and expenses.
The NASDAQ Chaikin Power US Large Cap Index applies a quantitative multi-factor model that seeks to identify securities that are expected to outperform peers by selecting securities from the Nasdaq US 300 Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.39%.
Sector Exposure and Top Holdings
ETFs offer 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.
For CLRG, it has heaviest allocation in the Information Technology sector --about 25% of the portfolio --while Healthcare and Financials round out the top three.
Taking into account individual holdings, Eog Resources Inc (EOG - Free Report) accounts for about 1.52% of the fund's total assets, followed by Arista Networks Inc (ANET - Free Report) and Mckesson Corp (MCK - Free Report) .
The top 10 holdings account for about 13.49% of total assets under management.
Performance and Risk
The ETF has lost about -16.92% so far this year and is down about -9.43% in the last one year (as of 06/30/2022). In the past 52-week period, it has traded between $28.65 and $36.15.
The ETF has a beta of 1.07 and standard deviation of 24.81% for the trailing three-year period. With about 104 holdings, it effectively diversifies company-specific risk.
Alternatives
IQ Chaikin U.S. Large Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $280.64 billion in assets, SPDR S&P 500 ETF has $348.37 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
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.