Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the IQ Chaikin U.S. Large Cap ETF (
CLRG Quick Quote CLRG - Free Report) is a smart beta exchange traded fund launched on 12/13/2017. What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
CLRG is managed by New York Life Investments, and this fund has amassed over $317.59 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the NASDAQ CHAIKIN POWER US LARGE CAP INDEX .
The NASDAQ Chaikin Power US Large Cap Index applies a quantitative multi-factor model that seeks to identify securities that are expected to outperform peers by selecting securities from the Nasdaq US 300 Index.
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.
Operating expenses on an annual basis are 0.25% for CLRG, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.11%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 24.60% of the portfolio. Healthcare and Financials round out the top three.
Taking into account individual holdings, Eog Resources Inc (
EOG Quick Quote EOG - Free Report) accounts for about 1.52% of the fund's total assets, followed by Arista Networks Inc ( ANET Quick Quote ANET - Free Report) and Mckesson Corp ( MCK Quick Quote MCK - Free Report) .
The top 10 holdings account for about 13.49% of total assets under management.
Performance and Risk
The ETF has lost about -7.81% and is up roughly 3.38% so far this year and in the past one year (as of 04/25/2022), respectively. CLRG has traded between $31.72 and $36.15 during this last 52-week period.
The ETF has a beta of 1.09 and standard deviation of 23.80% for the trailing three-year period. With about 104 holdings, it effectively diversifies company-specific risk.
IQ Chaikin U.S. Large Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (
IVV Quick Quote IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF ( SPY Quick Quote SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $302.40 billion in assets, SPDR S&P 500 ETF has $383.74 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
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.