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Is iShares International Small-Cap Equity Factor ETF (ISCF) a Strong ETF Right Now?
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Designed to provide broad exposure to the Broad Developed World ETFs category of the market, the iShares International Small-Cap Equity Factor ETF (ISCF - Free Report) is a smart beta exchange traded fund launched on 04/28/2015.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
The fund is sponsored by Blackrock. It has amassed assets over $556.55 million, making it one of the average sized ETFs in the Broad Developed World ETFs. Before fees and expenses, ISCF seeks to match the performance of the MSCI World exUSA Small Cap Diversified Multiple-Factor Index.
The STOXX International Small-Cap Equity Factor Index composes of global developed market small-capitalization stocks, excluding the US, that have favourable exposure to target style factors subject to constraints.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.23%.
The fund has a 12-month trailing dividend yield of 3.75%.
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.
When you look at individual holdings, Vat Group Ag (VACN) accounts for about 0.64% of the fund's total assets, followed by Logitech International Sa (LOGN - Free Report) and Swissquote Group Holding Sa (SQN).
Its top 10 holdings account for approximately 5.03% of ISCF's total assets under management.
Performance and Risk
Year-to-date, the iShares International Small-Cap Equity Factor ETF has added roughly 4.98% so far, and is up about 13.36% over the last 12 months (as of 06/06/2024). ISCF has traded between $27.69 and $33.85 in this past 52-week period.
ISCF has a beta of 0.97 and standard deviation of 16.92% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 1036 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares International Small-Cap Equity Factor ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Total International Stock ETF (VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $71.65 billion in assets, Vanguard FTSE Developed Markets ETF has $134.36 billion. VXUS has an expense ratio of 0.08% and VEA charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
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 International Small-Cap Equity Factor ETF (ISCF) a Strong ETF Right Now?
Designed to provide broad exposure to the Broad Developed World ETFs category of the market, the iShares International Small-Cap Equity Factor ETF (ISCF - Free Report) is a smart beta exchange traded fund launched on 04/28/2015.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
The fund is sponsored by Blackrock. It has amassed assets over $556.55 million, making it one of the average sized ETFs in the Broad Developed World ETFs. Before fees and expenses, ISCF seeks to match the performance of the MSCI World exUSA Small Cap Diversified Multiple-Factor Index.
The STOXX International Small-Cap Equity Factor Index composes of global developed market small-capitalization stocks, excluding the US, that have favourable exposure to target style factors subject to constraints.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.23%.
The fund has a 12-month trailing dividend yield of 3.75%.
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.
When you look at individual holdings, Vat Group Ag (VACN) accounts for about 0.64% of the fund's total assets, followed by Logitech International Sa (LOGN - Free Report) and Swissquote Group Holding Sa (SQN).
Its top 10 holdings account for approximately 5.03% of ISCF's total assets under management.
Performance and Risk
Year-to-date, the iShares International Small-Cap Equity Factor ETF has added roughly 4.98% so far, and is up about 13.36% over the last 12 months (as of 06/06/2024). ISCF has traded between $27.69 and $33.85 in this past 52-week period.
ISCF has a beta of 0.97 and standard deviation of 16.92% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 1036 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares International Small-Cap Equity Factor ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Total International Stock ETF (VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $71.65 billion in assets, Vanguard FTSE Developed Markets ETF has $134.36 billion. VXUS has an expense ratio of 0.08% and VEA charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
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.