The iShares Core Conservative Allocation ETF (AOK - Free Report) made its debut on 11/04/2008, and is a smart beta exchange traded fund that provides broad exposure to the Total Portfolio ETFs category of the U.S. equity 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $468.37 M, this makes it the largest ETF in the Total Portfolio ETFs. AOK is managed by Blackrock. This particular fund, before fees and expenses, seeks to match the performance of the S&P Target Risk Conservative Index.
The S&P Target Risk Conservative Index seeks to measure the performance of an asset allocation strategy targeted to a conservative risk profile.
Cost & Other Expenses
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.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it the least expensive product in the space.
It's 12-month trailing dividend yield comes in at 2.09%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Ishares Core Total Usd Bond Market (IUSB - Free Report) accounts for about 59.22% of the fund's total assets, followed by Ishares Core S&p 500 Etf (IVV - Free Report) and Ishares Core Msci Int Devel Etf (IDEV - Free Report) .
The top 10 holdings account for about 100.02% of total assets under management.
Performance and Risk
The fund's year-to-date return has lost about -1.29%, and it's up approximately 2.42% in the last one year (as of 06/29/2018). AOK has traded between $33.64 and $35.24 in the past 52-week period.
AOK has a beta of 0.32 and standard deviation of 4.52% for the trailing three-year period. With about 9 holdings, it has more concentrated exposure than peers.
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.