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Should iShares MSCI USA SmallCap Multifactor ETF (SMLF) Be on Your Investing Radar?
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If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the iShares MSCI USA SmallCap Multifactor ETF (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 $1.02 billion, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 1.13%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Healthcare sector--about 17.60% of the portfolio. Information Technology and Consumer Discretionary round out the top three.
Looking at individual holdings, Marathon Oil Corp (MRO - Free Report) accounts for about 1.81% of total assets, followed by Alcoa Corp (AA - Free Report) and Jones Lang Lasalle Inc (JLL - Free Report) .
The top 10 holdings account for about 11.72% 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 -6.51% so far this year and is up roughly 1.49% in the last one year (as of 04/22/2022). In the past 52-week period, it has traded between $51.30 and $59.93.
The ETF has a beta of 1.09 and standard deviation of 27.33% for the trailing three-year period, making it a high risk choice in the space. With about 501 holdings, it effectively diversifies company-specific risk.
Alternatives
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 - Free Report) and the iShares Core S&P SmallCap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $58.01 billion in assets, iShares Core S&P SmallCap ETF has $70.59 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.
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Should iShares MSCI USA SmallCap Multifactor ETF (SMLF) Be on Your Investing Radar?
If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the iShares MSCI USA SmallCap Multifactor ETF (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 $1.02 billion, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 1.13%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Healthcare sector--about 17.60% of the portfolio. Information Technology and Consumer Discretionary round out the top three.
Looking at individual holdings, Marathon Oil Corp (MRO - Free Report) accounts for about 1.81% of total assets, followed by Alcoa Corp (AA - Free Report) and Jones Lang Lasalle Inc (JLL - Free Report) .
The top 10 holdings account for about 11.72% 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 -6.51% so far this year and is up roughly 1.49% in the last one year (as of 04/22/2022). In the past 52-week period, it has traded between $51.30 and $59.93.
The ETF has a beta of 1.09 and standard deviation of 27.33% for the trailing three-year period, making it a high risk choice in the space. With about 501 holdings, it effectively diversifies company-specific risk.
Alternatives
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 - Free Report) and the iShares Core S&P SmallCap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $58.01 billion in assets, iShares Core S&P SmallCap ETF has $70.59 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.