Looking for broad exposure to the Small Cap Blend segment of the US equity market? You should consider the iShares MSCI USA SmallCap Multifactor ETF (
SMLF Quick Quote SMLF - Free Report) , a passively managed exchange traded fund launched on 04/28/2015.
The fund is sponsored by Blackrock. It has amassed assets over $993.90 million, making it one of the larger 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 usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.30%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.14%.
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.
This ETF has heaviest allocation to the Healthcare sector--about 19.10% of the portfolio. Information Technology and Consumer Discretionary round out the top three.
Looking at individual holdings, Williams Sonoma Inc (
WSM Quick Quote WSM - Free Report) accounts for about 1.31% of total assets, followed by Deckers Outdoor Corp ( DECK Quick Quote DECK - Free Report) and Quanta Services Inc ( PWR Quick Quote PWR - Free Report) .
The top 10 holdings account for about 6.48% of total assets under management.
Performance and Risk
SMLF seeks to match the performance of the MSCI USA Small Cap Diversified Multiple-Factor Index before fees and expenses. The MSCI USA Small Cap Diversified Multiple-Factor Index is designed to select equity securities from MSCI USA Small Cap Index that have high exposure to four investment style factors: value, quality, momentum and low size.
The ETF has lost about -6.47% so far this year and was up about 4.44% in the last one year (as of 02/14/2022). In the past 52-week period, it has traded between $49.06 and $59.93.
The ETF has a beta of 1.12 and standard deviation of 26.96% for the trailing three-year period, making it a high risk choice in the space. With about 489 holdings, it effectively diversifies company-specific risk.
IShares MSCI USA SmallCap Multifactor 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, SMLF 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 Quick Quote IWM - Free Report) and the iShares Core S&P SmallCap ETF ( IJR Quick Quote IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $58.81 billion in assets, iShares Core S&P SmallCap ETF has $70.27 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%. Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.