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Should iShares MSCI USA SmallCap Multifactor ETF (SMLF) Be on Your Investing Radar?
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The iShares MSCI USA SmallCap Multifactor ETF (SMLF - Free Report) was launched on 04/28/2015, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $996.76 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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 0.30%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.24%.
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 18.40% of the portfolio. Information Technology and Consumer Discretionary round out the top three.
Looking at individual holdings, Ovintiv Inc (OVV - Free Report) accounts for about 1.30% of total assets, followed by United Therapeutics Corp (UTHR - Free Report) and Blk Csh Fnd Treasury Sl Agency (XTSLA).
The top 10 holdings account for about 9.74% 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 -9.27% so far this year and is down about -2.12% in the last one year (as of 08/23/2022). In the past 52-week period, it has traded between $46.10 and $59.93.
The ETF has a beta of 1.08 and standard deviation of 28.40% for the trailing three-year period, making it a high risk choice in the space. With about 508 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 good 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 $55.41 billion in assets, iShares Core S&P SmallCap ETF has $68.98 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.
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Should iShares MSCI USA SmallCap Multifactor ETF (SMLF) Be on Your Investing Radar?
The iShares MSCI USA SmallCap Multifactor ETF (SMLF - Free Report) was launched on 04/28/2015, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $996.76 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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 0.30%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.24%.
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 18.40% of the portfolio. Information Technology and Consumer Discretionary round out the top three.
Looking at individual holdings, Ovintiv Inc (OVV - Free Report) accounts for about 1.30% of total assets, followed by United Therapeutics Corp (UTHR - Free Report) and Blk Csh Fnd Treasury Sl Agency (XTSLA).
The top 10 holdings account for about 9.74% 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 -9.27% so far this year and is down about -2.12% in the last one year (as of 08/23/2022). In the past 52-week period, it has traded between $46.10 and $59.93.
The ETF has a beta of 1.08 and standard deviation of 28.40% for the trailing three-year period, making it a high risk choice in the space. With about 508 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 good 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 $55.41 billion in assets, iShares Core S&P SmallCap ETF has $68.98 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.