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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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $280.49 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. 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
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 cousins, other things remaining the same.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it on par with most peer products in the space.
CLRG's 12-month trailing dividend yield is 1.31%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For CLRG, it has heaviest allocation in the Information Technology sector --about 22.50% of the portfolio --while Healthcare and Financials round out the top three.
Taking into account individual holdings, Gilead Sciences Inc (GILD - Free Report) accounts for about 1.62% of the fund's total assets, followed by Cigna Corp (CI - Free Report) and Exxon Mobil Corp (XOM - Free Report) .
The top 10 holdings account for about 13.61% of total assets under management.
Performance and Risk
So far this year, CLRG has added about 2.76%, and is up about 0.12% in the last one year (as of 03/09/2023). During this past 52-week period, the fund has traded between $28.38 and $35.25.
CLRG has a beta of 1.04 and standard deviation of 25.16% for the trailing three-year period. With about 101 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 $298.73 billion in assets, SPDR S&P 500 ETF has $359.57 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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $280.49 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. 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
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 cousins, other things remaining the same.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it on par with most peer products in the space.
CLRG's 12-month trailing dividend yield is 1.31%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For CLRG, it has heaviest allocation in the Information Technology sector --about 22.50% of the portfolio --while Healthcare and Financials round out the top three.
Taking into account individual holdings, Gilead Sciences Inc (GILD - Free Report) accounts for about 1.62% of the fund's total assets, followed by Cigna Corp (CI - Free Report) and Exxon Mobil Corp (XOM - Free Report) .
The top 10 holdings account for about 13.61% of total assets under management.
Performance and Risk
So far this year, CLRG has added about 2.76%, and is up about 0.12% in the last one year (as of 03/09/2023). During this past 52-week period, the fund has traded between $28.38 and $35.25.
CLRG has a beta of 1.04 and standard deviation of 25.16% for the trailing three-year period. With about 101 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 $298.73 billion in assets, SPDR S&P 500 ETF has $359.57 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.