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Is iShares MSCI ACWI Low Carbon Target ETF (CRBN) a Hot ETF Right Now?
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Launched on 12/08/2014, the iShares MSCI ACWI Low Carbon Target ETF (CRBN - Free Report) is a smart beta exchange traded fund offering broad exposure to the World ETFs category of the U.S. equity market.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $557.35 M, this makes it one of the largest ETFs in the World ETFs. CRBN is managed by Blackrock. This particular fund, before fees and expenses, seeks to match the performance of the MSCI ACWI Low Carbon Target Index.
The MSCI ACWI Low Carbon Target Index is designed to address two dimensions of carbon exposure ? carbon emissions and potential carbon emissions from fossil fuel reserves.
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 0.20% for CRBN, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 2%.
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.
Taking into account individual holdings, Apple Inc (AAPL - Free Report) accounts for about 2.13% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Amazon Com Inc (AMZN - Free Report) .
The top 10 holdings account for about 10.6% of total assets under management.
Performance and Risk
The fund's year-to-date return has added about 2.52%, and is up roughly 11.92% in the last one year (as of 06/15/2018). CRBN has traded between $106.96 and $125.90 in the past 52-week period.
CRBN has a beta of 1 and standard deviation of 12.45% for the trailing three-year period, which makes the fund a low choice in the space. With about 1242 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI ACWI Low Carbon Target ETF is an excellent option for investors seeking to outperform the World ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
IShares MSCI USA ESG Select ETF (SUSA - Free Report) tracks MSCI USA ESG Select Index and the iShares MSCI KLD 400 Social ETF (DSI - Free Report) tracks MSCI KLD 400 Social Index. IShares MSCI USA ESG Select ETF has $711.12 M in assets, iShares MSCI KLD 400 Social ETF has $1.10 B. SUSA has an expense ratio of 0.25% and DSI charges 0.25%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.
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 iShares MSCI ACWI Low Carbon Target ETF (CRBN) a Hot ETF Right Now?
Launched on 12/08/2014, the iShares MSCI ACWI Low Carbon Target ETF (CRBN - Free Report) is a smart beta exchange traded fund offering broad exposure to the World ETFs category of the U.S. equity market.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $557.35 M, this makes it one of the largest ETFs in the World ETFs. CRBN is managed by Blackrock. This particular fund, before fees and expenses, seeks to match the performance of the MSCI ACWI Low Carbon Target Index.
The MSCI ACWI Low Carbon Target Index is designed to address two dimensions of carbon exposure ? carbon emissions and potential carbon emissions from fossil fuel reserves.
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 0.20% for CRBN, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 2%.
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.
Taking into account individual holdings, Apple Inc (AAPL - Free Report) accounts for about 2.13% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Amazon Com Inc (AMZN - Free Report) .
The top 10 holdings account for about 10.6% of total assets under management.
Performance and Risk
The fund's year-to-date return has added about 2.52%, and is up roughly 11.92% in the last one year (as of 06/15/2018). CRBN has traded between $106.96 and $125.90 in the past 52-week period.
CRBN has a beta of 1 and standard deviation of 12.45% for the trailing three-year period, which makes the fund a low choice in the space. With about 1242 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI ACWI Low Carbon Target ETF is an excellent option for investors seeking to outperform the World ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
IShares MSCI USA ESG Select ETF (SUSA - Free Report) tracks MSCI USA ESG Select Index and the iShares MSCI KLD 400 Social ETF (DSI - Free Report) tracks MSCI KLD 400 Social Index. IShares MSCI USA ESG Select ETF has $711.12 M in assets, iShares MSCI KLD 400 Social ETF has $1.10 B. SUSA has an expense ratio of 0.25% and DSI charges 0.25%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.
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.