Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the IQ Chaikin U.S. Small Cap ETF (
CSML Quick Quote CSML - Free Report) is a passively managed exchange traded fund launched on 05/16/2017.
The fund is sponsored by New York Life Investments. It has amassed assets over $200.24 million, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
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 counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.35%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.85%.
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.
This ETF has heaviest allocation to the Financials sector--about 18.90% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Domo Inc - Class B (
DOMO Quick Quote DOMO - Free Report) accounts for about 0.68% of total assets, followed by Brinker International Inc ( EAT Quick Quote EAT - Free Report) and Smith & Wesson Brands Inc ( SWBI Quick Quote SWBI - Free Report) .
The top 10 holdings account for about 4.91% of total assets under management.
Performance and Risk
CSML seeks to match the performance of the NASDAQ Chaikin Power US Small Cap Index before fees and expenses. 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.
The ETF has added roughly 21.22% so far this year and was up about 71.95% in the last one year (as of 03/10/2021). In the past 52-week period, it has traded between $14.38 and $34.89.
The ETF has a beta of 1.40 and standard deviation of 30.56% for the trailing three-year period. With about 489 holdings, it effectively diversifies company-specific risk.
IQ Chaikin U.S. Small Cap ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, CSML is a good option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P SmallCap ETF (
IJR Quick Quote IJR - Free Report) and the iShares Russell 2000 ETF ( IWM Quick Quote IWM - Free Report) track a similar index. While iShares Core S&P SmallCap ETF has $68.94 billion in assets, iShares Russell 2000 ETF has $69.67 billion. IJR has an expense ratio of 0.06% and IWM charges 0.19%. Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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.