We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is FlexShares Morningstar U.S. Market Factor Tilt ETF (TILT) a Strong ETF Right Now?
Read MoreHide Full Article
Designed to provide broad exposure to the Style Box - All Cap Blend category of the market, the FlexShares Morningstar U.S. Market Factor Tilt ETF (TILT - Free Report) is a smart beta exchange traded fund launched on 09/16/2011.
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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Flexshares, TILT has amassed assets over $1.57 billion, making it one of the larger ETFs in the Style Box - All Cap Blend. Before fees and expenses, TILT seeks to match the performance of the Morningstar U.S. Market Factor Tilt Index.
The Morningstar U.S. Market Factor Tilt Index measures the performance of U.S. equity markets with increased exposure toward small-capitalization and value stocks.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it on par with most peer products in the space.
TILT's 12-month trailing dividend yield is 1.38%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
TILT's heaviest allocation is in the Information Technology sector, which is about 23.60% of the portfolio. Its Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Microsoft Corp Common Stock Usd 0.00000625 (MSFT - Free Report) accounts for about 4.52% of total assets, followed by Apple Inc Common Stock Usd 0.00001 (AAPL - Free Report) and Nvidia Corp Common Stock Usd 0.001 (NVDA - Free Report) .
Its top 10 holdings account for approximately 21.14% of TILT's total assets under management.
Performance and Risk
Year-to-date, the FlexShares Morningstar U.S. Market Factor Tilt ETF return is roughly 5.67% so far, and is up about 26.24% over the last 12 months (as of 05/06/2024). TILT has traded between $154.26 and $198.39 in this past 52-week period.
The ETF has a beta of 1.09 and standard deviation of 17.89% for the trailing three-year period, making it a medium risk choice in the space. With about 1989 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares Morningstar U.S. Market Factor Tilt ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P Total U.S. Stock Market ETF (ITOT - Free Report) tracks S&P Total Market Index and the Vanguard Total Stock Market ETF (VTI - Free Report) tracks CRSP US Total Market Index. IShares Core S&P Total U.S. Stock Market ETF has $52.98 billion in assets, Vanguard Total Stock Market ETF has $379.95 billion. ITOT has an expense ratio of 0.03% and VTI charges 0.03%.
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 - All 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is FlexShares Morningstar U.S. Market Factor Tilt ETF (TILT) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - All Cap Blend category of the market, the FlexShares Morningstar U.S. Market Factor Tilt ETF (TILT - Free Report) is a smart beta exchange traded fund launched on 09/16/2011.
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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Flexshares, TILT has amassed assets over $1.57 billion, making it one of the larger ETFs in the Style Box - All Cap Blend. Before fees and expenses, TILT seeks to match the performance of the Morningstar U.S. Market Factor Tilt Index.
The Morningstar U.S. Market Factor Tilt Index measures the performance of U.S. equity markets with increased exposure toward small-capitalization and value stocks.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it on par with most peer products in the space.
TILT's 12-month trailing dividend yield is 1.38%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
TILT's heaviest allocation is in the Information Technology sector, which is about 23.60% of the portfolio. Its Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Microsoft Corp Common Stock Usd 0.00000625 (MSFT - Free Report) accounts for about 4.52% of total assets, followed by Apple Inc Common Stock Usd 0.00001 (AAPL - Free Report) and Nvidia Corp Common Stock Usd 0.001 (NVDA - Free Report) .
Its top 10 holdings account for approximately 21.14% of TILT's total assets under management.
Performance and Risk
Year-to-date, the FlexShares Morningstar U.S. Market Factor Tilt ETF return is roughly 5.67% so far, and is up about 26.24% over the last 12 months (as of 05/06/2024). TILT has traded between $154.26 and $198.39 in this past 52-week period.
The ETF has a beta of 1.09 and standard deviation of 17.89% for the trailing three-year period, making it a medium risk choice in the space. With about 1989 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares Morningstar U.S. Market Factor Tilt ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P Total U.S. Stock Market ETF (ITOT - Free Report) tracks S&P Total Market Index and the Vanguard Total Stock Market ETF (VTI - Free Report) tracks CRSP US Total Market Index. IShares Core S&P Total U.S. Stock Market ETF has $52.98 billion in assets, Vanguard Total Stock Market ETF has $379.95 billion. ITOT has an expense ratio of 0.03% and VTI charges 0.03%.
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 - All 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.