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Is IQ Chaikin U.S. Small Cap ETF (CSML) a Strong ETF Right Now?
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The IQ Chaikin U.S. Small Cap ETF was launched on 05/16/2017, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Small Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
CSML is managed by New York Life Investments, and this fund has amassed over $202.73 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Blend. CSML seeks to match the performance of the NASDAQ Chaikin Power US Small Cap Index before fees and expenses.
The NASDAQ Chaikin Power US Small Cap Index is a rules-based, quantitative index designed to enhance the NASDAQ US 1500 Index, by selecting stocks with the highest Chaikin Power Gauge rating.
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 0.35% for CSML, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.52%.
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.
Representing 27.70% of the portfolio, the fund has heaviest allocation to the Financials sector; Industrials and Information Technology round out the top three.
Looking at individual holdings, Dillards Inc-Cl A (DDS - Free Report) accounts for about 0.47% of total assets, followed by Idt Corp-Class B (IDT - Free Report) and A-Mark Precious Metals In (AMRK - Free Report) .
CSML's top 10 holdings account for about 3.89% of its total assets under management.
Performance and Risk
The ETF has lost about -7.33% so far this year and was up about 5.33% in the last one year (as of 03/07/2022). In the past 52-week period, it has traded between $33.14 and $38.36.
CSML has a beta of 1.29 and standard deviation of 30.93% for the trailing three-year period. With about 488 holdings, it effectively diversifies company-specific risk.
Alternatives
IQ Chaikin U.S. Small Cap ETF is an excellent option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 2000 ETF (IWM - Free Report) tracks Russell 2000 Index and the iShares Core S&P SmallCap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $58.76 billion in assets, iShares Core S&P SmallCap ETF has $70.35 billion. IWM has an expense ratio of 0.19% and IJR charges 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 IQ Chaikin U.S. Small Cap ETF (CSML) a Strong ETF Right Now?
The IQ Chaikin U.S. Small Cap ETF was launched on 05/16/2017, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Small Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
CSML is managed by New York Life Investments, and this fund has amassed over $202.73 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Blend. CSML seeks to match the performance of the NASDAQ Chaikin Power US Small Cap Index before fees and expenses.
The NASDAQ Chaikin Power US Small Cap Index is a rules-based, quantitative index designed to enhance the NASDAQ US 1500 Index, by selecting stocks with the highest Chaikin Power Gauge rating.
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 0.35% for CSML, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.52%.
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.
Representing 27.70% of the portfolio, the fund has heaviest allocation to the Financials sector; Industrials and Information Technology round out the top three.
Looking at individual holdings, Dillards Inc-Cl A (DDS - Free Report) accounts for about 0.47% of total assets, followed by Idt Corp-Class B (IDT - Free Report) and A-Mark Precious Metals In (AMRK - Free Report) .
CSML's top 10 holdings account for about 3.89% of its total assets under management.
Performance and Risk
The ETF has lost about -7.33% so far this year and was up about 5.33% in the last one year (as of 03/07/2022). In the past 52-week period, it has traded between $33.14 and $38.36.
CSML has a beta of 1.29 and standard deviation of 30.93% for the trailing three-year period. With about 488 holdings, it effectively diversifies company-specific risk.
Alternatives
IQ Chaikin U.S. Small Cap ETF is an excellent option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 2000 ETF (IWM - Free Report) tracks Russell 2000 Index and the iShares Core S&P SmallCap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $58.76 billion in assets, iShares Core S&P SmallCap ETF has $70.35 billion. IWM has an expense ratio of 0.19% and IJR charges 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.