We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is IQ Chaikin U.S. Small Cap ETF (CSML) a Strong ETF Right Now?
Read MoreHide Full Article
Making its debut on 05/16/2017, smart beta exchange traded fund IQ Chaikin U.S. Small Cap ETF provides investors broad exposure to the Style Box - Small Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
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.
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.
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 New York Life Investments, CSML has amassed assets over $240.80 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the NASDAQ Chaikin Power US Small Cap Index.
The NASDAQ Chaikin Power US Small Cap Index is a rules-based, quantitative index designed to enhance the NASDAQ US 1500 Index, by selecting stocks with the highest Chaikin Power Gauge rating.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.35%.
CSML's 12-month trailing dividend yield is 1.21%.
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.
This ETF has heaviest allocation in the Industrials sector - about 21% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Immunovant Inc (IMVT - Free Report) accounts for about 0.66% of total assets, followed by Super Micro Computer Inc (SMCI - Free Report) and Ishares Core S&p Small-Ca (IJR - Free Report) .
The top 10 holdings account for about 4.68% of total assets under management.
Performance and Risk
Year-to-date, the IQ Chaikin U.S. Small Cap ETF has added about 2.64% so far, and is up about 12.34% over the last 12 months (as of 06/20/2023). CSML has traded between $28.77 and $35.58 in this past 52-week period.
CSML has a beta of 1.21 and standard deviation of 22.47% for the trailing three-year period. With about 485 holdings, it effectively diversifies company-specific risk.
Alternatives
IQ Chaikin U.S. Small Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 ETF (IWM - Free Report) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $56.97 billion in assets, iShares Core S&P Small-Cap ETF has $67.70 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
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 - Small 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is IQ Chaikin U.S. Small Cap ETF (CSML) a Strong ETF Right Now?
Making its debut on 05/16/2017, smart beta exchange traded fund IQ Chaikin U.S. Small Cap ETF provides investors broad exposure to the Style Box - Small Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
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.
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.
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 New York Life Investments, CSML has amassed assets over $240.80 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the NASDAQ Chaikin Power US Small Cap Index.
The NASDAQ Chaikin Power US Small Cap Index is a rules-based, quantitative index designed to enhance the NASDAQ US 1500 Index, by selecting stocks with the highest Chaikin Power Gauge rating.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.35%.
CSML's 12-month trailing dividend yield is 1.21%.
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.
This ETF has heaviest allocation in the Industrials sector - about 21% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Immunovant Inc (IMVT - Free Report) accounts for about 0.66% of total assets, followed by Super Micro Computer Inc (SMCI - Free Report) and Ishares Core S&p Small-Ca (IJR - Free Report) .
The top 10 holdings account for about 4.68% of total assets under management.
Performance and Risk
Year-to-date, the IQ Chaikin U.S. Small Cap ETF has added about 2.64% so far, and is up about 12.34% over the last 12 months (as of 06/20/2023). CSML has traded between $28.77 and $35.58 in this past 52-week period.
CSML has a beta of 1.21 and standard deviation of 22.47% for the trailing three-year period. With about 485 holdings, it effectively diversifies company-specific risk.
Alternatives
IQ Chaikin U.S. Small Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 ETF (IWM - Free Report) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $56.97 billion in assets, iShares Core S&P Small-Cap ETF has $67.70 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
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 - Small 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.