Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the iShares MSCI USA SmallCap Multifactor ETF (
SMLF Quick Quote SMLF - Free Report) is a passively managed exchange traded fund launched on 04/28/2015.
The fund is sponsored by Blackrock. It has amassed assets over $898.46 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
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
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.
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 1.37%.
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 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 Quick Quote MRO - Free Report) accounts for about 1.81% of total assets, followed by Alcoa Corp ( AA Quick Quote AA - Free Report) and Jones Lang Lasalle Inc ( JLL Quick Quote 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 -17.97% so far this year and is down about -10.98% in the last one year (as of 06/22/2022). In the past 52-week period, it has traded between $46.10 and $59.93.
The ETF has a beta of 1.07 and standard deviation of 28.28% 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.
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 $52.51 billion in assets, iShares Core S&P SmallCap ETF has $58.88 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%. Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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.