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Is iShares U.S. Small-Cap Equity Factor ETF (SMLF) a Strong ETF Right Now?
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Launched on 04/28/2015, the iShares U.S. Small-Cap Equity Factor ETF (SMLF - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Blend category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $1.74 billion, this makes it one of the larger ETFs in the Style Box - Small Cap Blend. SMLF is managed by Blackrock. Before fees and expenses, this particular fund 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.15%.
The fund has a 12-month trailing dividend yield of 1.43%.
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 in the Industrials sector - about 18.3% of the portfolio. Financials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Emcor Group Inc (EME) accounts for about 0.92% of the fund's total assets, followed by Carvana Class A (CVNA) and Duolingo Inc Class A (DUOL).
Performance and Risk
Year-to-date, the iShares U.S. Small-Cap Equity Factor ETF has lost about -2.51% so far, and it's up approximately 9.3% over the last 12 months (as of 06/18/2025). SMLF has traded between $54.28 and $74.15 in this past 52-week period.
The ETF has a beta of 1.07 and standard deviation of 21.18% for the trailing three-year period, making it a high risk choice in the space. With about 863 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) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR) tracks S&P SmallCap 600 Index. iShares Russell 2000 ETF has $63.01 billion in assets, iShares Core S&P Small-Cap ETF has $76.72 billion. IWM has an expense ratio of 0.19% and IJR changes 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?
Launched on 04/28/2015, the iShares U.S. Small-Cap Equity Factor ETF (SMLF - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Blend category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $1.74 billion, this makes it one of the larger ETFs in the Style Box - Small Cap Blend. SMLF is managed by Blackrock. Before fees and expenses, this particular fund 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.15%.
The fund has a 12-month trailing dividend yield of 1.43%.
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 in the Industrials sector - about 18.3% of the portfolio. Financials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Emcor Group Inc (EME) accounts for about 0.92% of the fund's total assets, followed by Carvana Class A (CVNA) and Duolingo Inc Class A (DUOL).
Performance and Risk
Year-to-date, the iShares U.S. Small-Cap Equity Factor ETF has lost about -2.51% so far, and it's up approximately 9.3% over the last 12 months (as of 06/18/2025). SMLF has traded between $54.28 and $74.15 in this past 52-week period.
The ETF has a beta of 1.07 and standard deviation of 21.18% for the trailing three-year period, making it a high risk choice in the space. With about 863 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) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR) tracks S&P SmallCap 600 Index. iShares Russell 2000 ETF has $63.01 billion in assets, iShares Core S&P Small-Cap ETF has $76.72 billion. IWM has an expense ratio of 0.19% and IJR changes 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.