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Is iShares U.S. Small-Cap Equity Factor ETF (SMLF) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Small Cap Blend category of the market, the iShares U.S. Small-Cap Equity Factor ETF (SMLF - Free Report) is a smart beta exchange traded fund launched on 04/28/2015.
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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
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 $851.47 million, this makes it one of the average sized ETFs in the Style Box - Small Cap Blend. SMLF is managed by Blackrock. This particular fund, before fees and expenses, seeks to match the performance of the MSCI USA Small Cap Diversified Multiple-Factor Index.
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.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are 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 1.14%.
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.
SMLF's heaviest allocation is in the Industrials sector, which is about 18.60% of the portfolio. Its 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) .
SMLF's top 10 holdings account for about 6.05% of its total assets under management.
Performance and Risk
The ETF has lost about -0.51% so far this year and is up roughly 11.97% in the last one year (as of 01/23/2024). In the past 52-week period, it has traded between $47.85 and $59.52.
SMLF has a beta of 1.11 and standard deviation of 21.84% for the trailing three-year period, which makes the fund 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 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 $63.31 billion in assets, iShares Core S&P Small-Cap ETF has $76.48 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.
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Is iShares U.S. Small-Cap Equity Factor ETF (SMLF) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Small Cap Blend category of the market, the iShares U.S. Small-Cap Equity Factor ETF (SMLF - Free Report) is a smart beta exchange traded fund launched on 04/28/2015.
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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
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 $851.47 million, this makes it one of the average sized ETFs in the Style Box - Small Cap Blend. SMLF is managed by Blackrock. This particular fund, before fees and expenses, seeks to match the performance of the MSCI USA Small Cap Diversified Multiple-Factor Index.
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.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are 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 1.14%.
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.
SMLF's heaviest allocation is in the Industrials sector, which is about 18.60% of the portfolio. Its 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) .
SMLF's top 10 holdings account for about 6.05% of its total assets under management.
Performance and Risk
The ETF has lost about -0.51% so far this year and is up roughly 11.97% in the last one year (as of 01/23/2024). In the past 52-week period, it has traded between $47.85 and $59.52.
SMLF has a beta of 1.11 and standard deviation of 21.84% for the trailing three-year period, which makes the fund 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 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 $63.31 billion in assets, iShares Core S&P Small-Cap ETF has $76.48 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.