A smart beta exchange traded fund, the iShares MSCI ACWI Low Carbon Target ETF (
CRBN Quick Quote CRBN - Free Report) debuted on 12/08/2014, and offers broad exposure to the World ETFs 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $866.28 million, this makes it one of the larger ETFs in the World ETFs. CRBN is managed by Blackrock. CRBN seeks to match the performance of the MSCI ACWI Low Carbon Target Index before fees and expenses.
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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for CRBN are 0.20%, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.32%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Apple Inc (
AAPL Quick Quote AAPL - Free Report) accounts for about 3.53% of the fund's total assets, followed by Microsoft Corp ( MSFT Quick Quote MSFT - Free Report) and Amazon Com Inc ( AMZN Quick Quote AMZN - Free Report) .
The top 10 holdings account for about 15.37% of total assets under management.
Performance and Risk
Year-to-date, the iShares MSCI ACWI Low Carbon Target ETF has added roughly 14.25% so far, and is up about 35.14% over the last 12 months (as of 07/27/2021). CRBN has traded between $126.86 and $168.30 in this past 52-week period.
CRBN has a beta of 0.95 and standard deviation of 21.01% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 1404 holdings, it effectively diversifies company-specific risk.
IShares MSCI ACWI Low Carbon Target ETF is a reasonable option for investors seeking to outperform the World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG Aware MSCI EM ETF (
ESGE Quick Quote ESGE - Free Report) tracks MSCI Emerging Markets ESG Focus Index and the iShares ESG Aware MSCI USA ETF ( ESGU Quick Quote ESGU - Free Report) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EM ETF has $7.52 billion in assets, iShares ESG Aware MSCI USA ETF has $19.48 billion. ESGE has an expense ratio of 0.25% and ESGU charges 0.15%.
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.
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Zacks ETF Center.