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Is IQ Chaikin U.S. Small Cap ETF (CSML) a Strong ETF Right Now?
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The IQ Chaikin U.S. Small Cap ETF was launched on 05/16/2017, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Small Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by New York Life Investments, CSML has amassed assets over $236.72 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. Before fees and expenses, CSML seeks to match the performance of the NASDAQ Chaikin Power US Small Cap Index.
The NASDAQ Chaikin Power US Small Cap Index is a rules-based, quantitative index designed to enhance the NASDAQ US 1500 Index, by selecting stocks with the highest Chaikin Power Gauge rating.
Cost & Other Expenses
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 cousins, other things remaining the same.
Operating expenses on an annual basis are 0.35% for CSML, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.49%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For CSML, it has heaviest allocation in the Financials sector --about 23.50% of the portfolio --while Industrials and Healthcare round out the top three.
Looking at individual holdings, Immunovant Inc (IMVT - Free Report) accounts for about 0.59% of total assets, followed by Super Micro Computer Inc (SMCI - Free Report) and Ars Pharmaceuticals Inc (SPRY - Free Report) .
The top 10 holdings account for about 4.37% of total assets under management.
Performance and Risk
The ETF has lost about -1.53% so far this year and is down about -6.20% in the last one year (as of 04/17/2023). In the past 52-week period, it has traded between $28.77 and $35.58.
The ETF has a beta of 1.21 and standard deviation of 25.37% for the trailing three-year period. With about 491 holdings, it effectively diversifies company-specific risk.
Alternatives
IQ Chaikin U.S. Small Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 ETF (IWM - Free Report) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $49.75 billion in assets, iShares Core S&P Small-Cap ETF has $65.43 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
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 - Small 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. Small Cap ETF (CSML) a Strong ETF Right Now?
The IQ Chaikin U.S. Small Cap ETF was launched on 05/16/2017, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Small Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by New York Life Investments, CSML has amassed assets over $236.72 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. Before fees and expenses, CSML seeks to match the performance of the NASDAQ Chaikin Power US Small Cap Index.
The NASDAQ Chaikin Power US Small Cap Index is a rules-based, quantitative index designed to enhance the NASDAQ US 1500 Index, by selecting stocks with the highest Chaikin Power Gauge rating.
Cost & Other Expenses
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 cousins, other things remaining the same.
Operating expenses on an annual basis are 0.35% for CSML, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.49%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For CSML, it has heaviest allocation in the Financials sector --about 23.50% of the portfolio --while Industrials and Healthcare round out the top three.
Looking at individual holdings, Immunovant Inc (IMVT - Free Report) accounts for about 0.59% of total assets, followed by Super Micro Computer Inc (SMCI - Free Report) and Ars Pharmaceuticals Inc (SPRY - Free Report) .
The top 10 holdings account for about 4.37% of total assets under management.
Performance and Risk
The ETF has lost about -1.53% so far this year and is down about -6.20% in the last one year (as of 04/17/2023). In the past 52-week period, it has traded between $28.77 and $35.58.
The ETF has a beta of 1.21 and standard deviation of 25.37% for the trailing three-year period. With about 491 holdings, it effectively diversifies company-specific risk.
Alternatives
IQ Chaikin U.S. Small Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 ETF (IWM - Free Report) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $49.75 billion in assets, iShares Core S&P Small-Cap ETF has $65.43 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
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 - Small 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.