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Should iShares U.S. Small-Cap Equity Factor ETF (SMLF) Be on Your Investing Radar?
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Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the iShares U.S. Small-Cap Equity Factor ETF (SMLF - Free Report) is a passively managed exchange traded fund launched on 04/28/2015.
The fund is sponsored by Blackrock. It has amassed assets over $836.65 million, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.15%.
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.
This ETF has heaviest allocation to the Industrials sector--about 18.40% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Deckers Outdoor Corp (DECK - Free Report) accounts for about 0.70% of total assets, followed by First Industrial Realty Trust Inc (FR - Free Report) and Builders Firstsource Inc (BLDR - Free Report) .
The top 10 holdings account for about 6.05% 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 STOXX U.S. Small-Cap Equity Factor Index (USD) composed of U.S. small-capitalization stocks that have favourable exposure to target style factors subject to constraints.
The ETF has lost about -1.90% so far this year and it's up approximately 14.73% in the last one year (as of 01/10/2024). In the past 52-week period, it has traded between $47.85 and $59.52.
The ETF has a beta of 1.11 and standard deviation of 21.86% for the trailing three-year period, making it a high risk choice in the space. With about 859 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Small-Cap Equity Factor 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 Small-Cap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $66.28 billion in assets, iShares Core S&P Small-Cap ETF has $74.82 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 U.S. Small-Cap Equity Factor ETF (SMLF) Be on Your Investing Radar?
Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the iShares U.S. Small-Cap Equity Factor ETF (SMLF - Free Report) is a passively managed exchange traded fund launched on 04/28/2015.
The fund is sponsored by Blackrock. It has amassed assets over $836.65 million, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.15%.
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.
This ETF has heaviest allocation to the Industrials sector--about 18.40% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Deckers Outdoor Corp (DECK - Free Report) accounts for about 0.70% of total assets, followed by First Industrial Realty Trust Inc (FR - Free Report) and Builders Firstsource Inc (BLDR - Free Report) .
The top 10 holdings account for about 6.05% 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 STOXX U.S. Small-Cap Equity Factor Index (USD) composed of U.S. small-capitalization stocks that have favourable exposure to target style factors subject to constraints.
The ETF has lost about -1.90% so far this year and it's up approximately 14.73% in the last one year (as of 01/10/2024). In the past 52-week period, it has traded between $47.85 and $59.52.
The ETF has a beta of 1.11 and standard deviation of 21.86% for the trailing three-year period, making it a high risk choice in the space. With about 859 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Small-Cap Equity Factor 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 Small-Cap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $66.28 billion in assets, iShares Core S&P Small-Cap ETF has $74.82 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.