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Is iShares International Small-Cap Equity Factor ETF (ISCF) a Strong ETF Right Now?
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Making its debut on 04/28/2015, smart beta exchange traded fund iShares International Small-Cap Equity Factor ETF (ISCF - Free Report) provides investors broad exposure to the Broad Developed World ETFs category of the market.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $565.02 million, which makes it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund, before fees and expenses, seeks to match the performance of the MSCI World exUSA Small Cap Diversified Multiple-Factor Index.
The STOXX International Small-Cap Equity Factor Index composes of global developed market small-capitalization stocks, excluding the US, that have favourable exposure to target style factors subject to constraints.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for ISCF are 0.23%, which makes it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 3.88%.
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.
Looking at individual holdings, Be Semiconductor Industries Nv (BESI) accounts for about 0.72% of total assets, followed by Celestica Inc (CLS - Free Report) and Vat Group Ag (VACN).
The top 10 holdings account for about 5.57% of total assets under management.
Performance and Risk
The ETF return is roughly 1.62% and is up about 9.12% so far this year and in the past one year (as of 04/03/2024), respectively. ISCF has traded between $27.69 and $33 during this last 52-week period.
The fund has a beta of 0.96 and standard deviation of 16.91% for the trailing three-year period, which makes ISCF a medium risk choice in this particular space. With about 986 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares International Small-Cap Equity Factor 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 $67.44 billion in assets, Vanguard FTSE Developed Markets ETF has $128.98 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 International Small-Cap Equity Factor ETF (ISCF) a Strong ETF Right Now?
Making its debut on 04/28/2015, smart beta exchange traded fund iShares International Small-Cap Equity Factor ETF (ISCF - Free Report) provides investors broad exposure to the Broad Developed World ETFs category of the market.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $565.02 million, which makes it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund, before fees and expenses, seeks to match the performance of the MSCI World exUSA Small Cap Diversified Multiple-Factor Index.
The STOXX International Small-Cap Equity Factor Index composes of global developed market small-capitalization stocks, excluding the US, that have favourable exposure to target style factors subject to constraints.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for ISCF are 0.23%, which makes it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 3.88%.
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.
Looking at individual holdings, Be Semiconductor Industries Nv (BESI) accounts for about 0.72% of total assets, followed by Celestica Inc (CLS - Free Report) and Vat Group Ag (VACN).
The top 10 holdings account for about 5.57% of total assets under management.
Performance and Risk
The ETF return is roughly 1.62% and is up about 9.12% so far this year and in the past one year (as of 04/03/2024), respectively. ISCF has traded between $27.69 and $33 during this last 52-week period.
The fund has a beta of 0.96 and standard deviation of 16.91% for the trailing three-year period, which makes ISCF a medium risk choice in this particular space. With about 986 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares International Small-Cap Equity Factor 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 $67.44 billion in assets, Vanguard FTSE Developed Markets ETF has $128.98 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.