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Is iShares Edge MSCI USA Size Factor ETF (SIZE) a Hot ETF Right Now?

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The iShares Edge MSCI USA Size Factor ETF (SIZE - Free Report) made its debut on 04/16/2013, and is a smart beta exchange traded fund that provides broad exposure to the Total Market (U.S.) ETFs category of the U.S. equity market.

What Are Smart Beta ETFs?

The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

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.

By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.

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 Blackrock, SIZE has amassed assets over $313.20 M, making it one of the average sized ETFs in the Total Market (U.S.) ETFs. Before fees and expenses, SIZE seeks to match the performance of the MSCI USA Risk Weighted Index.

The MSCI USA Risk Weighted Index comprises of U.S. large and mid-capitalization stocks with relatively smaller average market capitalization.

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.

Annual operating expenses for SIZE are 0.15%, which makes it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.65%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

For SIZE, it has heaviest allocation in the Financials sector --about 17.70% of the portfolio --while Industrials and Information Technology round out the top three.

When you look at individual holdings, Republic Services Inc (RSG - Free Report) accounts for about 0.46% of the fund's total assets, followed by Pepsico Inc (PEP - Free Report) and Coca-Cola (KO - Free Report) .

The top 10 holdings account for about 4.07% of total assets under management.

Performance and Risk

The fund's year-to-date return has lost about -1.36%, and is up about 9.43% in the last one year (as of 04/26/2018). SIZE has traded between $75.33 and $88.18 in the past 52-week period.

The fund has a beta of 0.90 and standard deviation of 12.41% for the trailing three-year period, which makes SIZE a high choice in this particular space. With about 637 holdings, it effectively diversifies company-specific risk.

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.