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Is IQ Chaikin U.S. Large Cap ETF (CLRG) a Strong ETF Right Now?
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The IQ Chaikin U.S. Large Cap ETF was launched on 12/13/2017, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Blend 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.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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 New York Life Investments. CLRG has been able to amass assets over $337.35 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. This particular fund seeks to match the performance of the NASDAQ CHAIKIN POWER US LARGE CAP INDEX before fees and expenses.
The NASDAQ Chaikin Power US Large Cap Index applies a quantitative multi-factor model that seeks to identify securities that are expected to outperform peers by selecting securities from the Nasdaq US 300 Index.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.25%.
The fund has a 12-month trailing dividend yield of 1.07%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
CLRG's heaviest allocation is in the Information Technology sector, which is about 25.80% of the portfolio. Its Healthcare and Financials round out the top three.
When you look at individual holdings, Zscaler Inc (ZS - Free Report) accounts for about 1.64% of the fund's total assets, followed by Intuit Inc (INTU - Free Report) and West Pharmaceutical Servi (WST - Free Report) .
The top 10 holdings account for about 13.06% of total assets under management.
Performance and Risk
So far this year, CLRG has added roughly 23.87%, and it's up approximately 25.57% in the last one year (as of 12/23/2021). During this past 52-week period, the fund has traded between $28.58 and $35.78.
The ETF has a beta of 1.10 and standard deviation of 23.67% for the trailing three-year period. With about 104 holdings, it effectively diversifies company-specific risk.
Alternatives
IQ Chaikin U.S. Large Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $330.42 billion in assets, SPDR S&P 500 ETF has $438.72 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
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 - Large 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 IQ Chaikin U.S. Large Cap ETF (CLRG) a Strong ETF Right Now?
The IQ Chaikin U.S. Large Cap ETF was launched on 12/13/2017, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Blend 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.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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 New York Life Investments. CLRG has been able to amass assets over $337.35 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. This particular fund seeks to match the performance of the NASDAQ CHAIKIN POWER US LARGE CAP INDEX before fees and expenses.
The NASDAQ Chaikin Power US Large Cap Index applies a quantitative multi-factor model that seeks to identify securities that are expected to outperform peers by selecting securities from the Nasdaq US 300 Index.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.25%.
The fund has a 12-month trailing dividend yield of 1.07%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
CLRG's heaviest allocation is in the Information Technology sector, which is about 25.80% of the portfolio. Its Healthcare and Financials round out the top three.
When you look at individual holdings, Zscaler Inc (ZS - Free Report) accounts for about 1.64% of the fund's total assets, followed by Intuit Inc (INTU - Free Report) and West Pharmaceutical Servi (WST - Free Report) .
The top 10 holdings account for about 13.06% of total assets under management.
Performance and Risk
So far this year, CLRG has added roughly 23.87%, and it's up approximately 25.57% in the last one year (as of 12/23/2021). During this past 52-week period, the fund has traded between $28.58 and $35.78.
The ETF has a beta of 1.10 and standard deviation of 23.67% for the trailing three-year period. With about 104 holdings, it effectively diversifies company-specific risk.
Alternatives
IQ Chaikin U.S. Large Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $330.42 billion in assets, SPDR S&P 500 ETF has $438.72 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
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 - Large 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.