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Is iShares MSCI Intl SmallCap Multifactor ETF (ISCF) a Strong ETF Right Now?
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The iShares MSCI Intl SmallCap Multifactor ETF (ISCF - Free Report) made its debut on 04/28/2015, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by Blackrock, ISCF has amassed assets over $525.97 million, making it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund seeks to match the performance of the MSCI World exUSA Small Cap Diversified Multiple-Factor Index before fees and expenses.
The MSCI World exUSA Small Cap Diversified Multiple-Factor Index is designed to select equity securities from MSCI World ex USA Small Cap Index that have high exposure to four investment style factors: value, quality, momentum and low size.
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 0.23% for this ETF, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 2.68%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Signify Nv (LIGHT) accounts for about 0.96% of total assets, followed by Crescent Point Energy Corp (CPG - Free Report) and Investec Plc (INVP).
Its top 10 holdings account for approximately 8.17% of ISCF's total assets under management.
Performance and Risk
The ETF has gained about 1.93% so far this year and is down about -12.46% in the last one year (as of 01/10/2023). In the past 52-week period, it has traded between $25.80 and $36.34.
ISCF has a beta of 0.94 and standard deviation of 23.47% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 713 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI Intl SmallCap Multifactor ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Total International Stock ETF (VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $51.45 billion in assets, Vanguard FTSE Developed Markets ETF has $103.38 billion. VXUS has an expense ratio of 0.07% and VEA charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
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 iShares MSCI Intl SmallCap Multifactor ETF (ISCF) a Strong ETF Right Now?
The iShares MSCI Intl SmallCap Multifactor ETF (ISCF - Free Report) made its debut on 04/28/2015, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by Blackrock, ISCF has amassed assets over $525.97 million, making it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund seeks to match the performance of the MSCI World exUSA Small Cap Diversified Multiple-Factor Index before fees and expenses.
The MSCI World exUSA Small Cap Diversified Multiple-Factor Index is designed to select equity securities from MSCI World ex USA Small Cap Index that have high exposure to four investment style factors: value, quality, momentum and low size.
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 0.23% for this ETF, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 2.68%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Signify Nv (LIGHT) accounts for about 0.96% of total assets, followed by Crescent Point Energy Corp (CPG - Free Report) and Investec Plc (INVP).
Its top 10 holdings account for approximately 8.17% of ISCF's total assets under management.
Performance and Risk
The ETF has gained about 1.93% so far this year and is down about -12.46% in the last one year (as of 01/10/2023). In the past 52-week period, it has traded between $25.80 and $36.34.
ISCF has a beta of 0.94 and standard deviation of 23.47% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 713 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI Intl SmallCap Multifactor ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Total International Stock ETF (VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $51.45 billion in assets, Vanguard FTSE Developed Markets ETF has $103.38 billion. VXUS has an expense ratio of 0.07% and VEA charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
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.