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Is IQ Chaikin U.S. Large Cap ETF (CLRG) a Strong ETF Right Now?
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The IQ Chaikin U.S. Large Cap ETF was launched on 12/13/2017, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $270.03 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Blend. CLRG is managed by New York Life Investments. CLRG seeks to match the performance of the NASDAQ CHAIKIN POWER US LARGE CAP INDEX before fees and expenses.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.25% for CLRG, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.44%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 22.10% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Healthcare and Financials round out the top three.
When you look at individual holdings, Cigna Corp (CI - Free Report) accounts for about 1.32% of the fund's total assets, followed by Mckesson Corp (MCK - Free Report) and Centene Corp (CNC - Free Report) .
Its top 10 holdings account for approximately 12.37% of CLRG's total assets under management.
Performance and Risk
Year-to-date, the IQ Chaikin U.S. Large Cap ETF has lost about -15.80% so far, and is down about -13.04% over the last 12 months (as of 11/04/2022). CLRG has traded between $28.38 and $36.15 in this past 52-week period.
CLRG has a beta of 1.04 and standard deviation of 25.34% for the trailing three-year period. With about 102 holdings, it effectively diversifies company-specific risk.
Alternatives
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 - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $283.12 billion in assets, SPDR S&P 500 ETF has $352.98 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.
Bottom Line
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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Is IQ Chaikin U.S. Large Cap ETF (CLRG) a Strong ETF Right Now?
The IQ Chaikin U.S. Large Cap ETF was launched on 12/13/2017, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $270.03 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Blend. CLRG is managed by New York Life Investments. CLRG seeks to match the performance of the NASDAQ CHAIKIN POWER US LARGE CAP INDEX before fees and expenses.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.25% for CLRG, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.44%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 22.10% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Healthcare and Financials round out the top three.
When you look at individual holdings, Cigna Corp (CI - Free Report) accounts for about 1.32% of the fund's total assets, followed by Mckesson Corp (MCK - Free Report) and Centene Corp (CNC - Free Report) .
Its top 10 holdings account for approximately 12.37% of CLRG's total assets under management.
Performance and Risk
Year-to-date, the IQ Chaikin U.S. Large Cap ETF has lost about -15.80% so far, and is down about -13.04% over the last 12 months (as of 11/04/2022). CLRG has traded between $28.38 and $36.15 in this past 52-week period.
CLRG has a beta of 1.04 and standard deviation of 25.34% for the trailing three-year period. With about 102 holdings, it effectively diversifies company-specific risk.
Alternatives
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 - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $283.12 billion in assets, SPDR S&P 500 ETF has $352.98 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.
Bottom Line
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.