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Should iShares MSCI USA SmallCap Min Vol Factor ETF (SMMV) Be on Your Investing Radar?
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Launched on 09/07/2016, the iShares MSCI USA SmallCap Min Vol Factor ETF (SMMV - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $850.30 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
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even 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.
Costs
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 0.20%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.10%.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation to the Healthcare sector--about 17.20% of the portfolio. Financials and Real Estate round out the top three.
Looking at individual holdings, Cubesmart Reit (CUBE - Free Report) accounts for about 1.94% of total assets, followed by American Homes Rent Reit Class A (AMH - Free Report) and Service (SCI - Free Report) .
The top 10 holdings account for about 13.1% of total assets under management.
Performance and Risk
SMMV seeks to match the performance of the MSCI USA Small Cap Minimum Volatility (USD) Index before fees and expenses. The MSCI USA Small Cap Minimum Volatility (USD) Index comprises of small-capitalization U.S. equities that, in the aggregate, have lower volatility characteristics relative to the small-capitalization U.S. equity market.
The ETF return is roughly 14.97% so far this year and is up about 15.59% in the last one year (as of 12/16/2021). In the past 52-week period, it has traded between $33.49 and $39.41.
The ETF has a beta of 0.83 and standard deviation of 21.35% for the trailing three-year period. With about 352 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA SmallCap Min Vol Factor 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, SMMV is a reasonable 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 Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P SmallCap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $68.10 billion in assets, iShares Core S&P SmallCap ETF has $71.79 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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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Should iShares MSCI USA SmallCap Min Vol Factor ETF (SMMV) Be on Your Investing Radar?
Launched on 09/07/2016, the iShares MSCI USA SmallCap Min Vol Factor ETF (SMMV - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $850.30 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
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even 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.
Costs
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 0.20%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.10%.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation to the Healthcare sector--about 17.20% of the portfolio. Financials and Real Estate round out the top three.
Looking at individual holdings, Cubesmart Reit (CUBE - Free Report) accounts for about 1.94% of total assets, followed by American Homes Rent Reit Class A (AMH - Free Report) and Service (SCI - Free Report) .
The top 10 holdings account for about 13.1% of total assets under management.
Performance and Risk
SMMV seeks to match the performance of the MSCI USA Small Cap Minimum Volatility (USD) Index before fees and expenses. The MSCI USA Small Cap Minimum Volatility (USD) Index comprises of small-capitalization U.S. equities that, in the aggregate, have lower volatility characteristics relative to the small-capitalization U.S. equity market.
The ETF return is roughly 14.97% so far this year and is up about 15.59% in the last one year (as of 12/16/2021). In the past 52-week period, it has traded between $33.49 and $39.41.
The ETF has a beta of 0.83 and standard deviation of 21.35% for the trailing three-year period. With about 352 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA SmallCap Min Vol Factor 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, SMMV is a reasonable 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 Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P SmallCap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $68.10 billion in assets, iShares Core S&P SmallCap ETF has $71.79 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.