The iShares MSCI ACWI Low Carbon Target ETF (CRBN) made its debut on 12/08/2014, and is a smart beta exchange traded fund that provides broad exposure to the World ETFs 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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.
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
The fund is managed by Blackrock. CRBN has been able to amass assets over $433.51 M, making it one of the larger ETFs in the World ETFs. CRBN seeks to match the performance of the MSCI ACWI Low Carbon Target Index before fees and expenses.
The MSCI ACWI Low Carbon Target Index is designed to address two dimensions of carbon exposure ? carbon emissions and potential carbon emissions from fossil fuel reserves.
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.
Operating expenses on an annual basis are 0.20% for this ETF, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.18%.
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.
When you look at individual holdings, Apple Inc (AAPL) accounts for about 2.04% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (
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CRBN's top 10 holdings account for about 10.95% of its total assets under management.
Performance and Risk
The ETF has gained about 15.27% so far this year and it's up approximately 4.37% in the last one year (as of 04/05/2019). In the past 52-week period, it has traded between $99 and $120.83.
CRBN has a beta of 0.97 and standard deviation of 11.96% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 1305 holdings, it effectively diversifies company-specific risk.
IShares MSCI ACWI Low Carbon Target ETF is an excellent option for investors seeking to outperform the World ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
IShares MSCI USA ESG Select ETF (SUSA) tracks MSCI USA ESG Select Index and the iShares MSCI KLD 400 Social ETF (DSI) tracks MSCI KLD 400 Social Index. IShares MSCI USA ESG Select ETF has $968.66 M in assets, iShares MSCI KLD 400 Social ETF has $1.36 B. SUSA has an expense ratio of 0.25% and DSI charges 0.25%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.
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.