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Is iShares International Small-Cap Equity Factor ETF (ISCF) a Strong ETF Right Now?
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The iShares International Small-Cap Equity Factor ETF (ISCF - Free Report) made its debut on 04/28/2015, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World ETFs 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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $527.92 million, this makes it one of the average sized ETFs in the Broad Developed World ETFs. ISCF is managed by Blackrock. This particular fund, before fees and expenses, 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.23%.
It has a 12-month trailing dividend yield of 4.06%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Banco De Sabadell Sa- (SAB) accounts for about 0.67% of total assets, followed by Vat Group Ag- (VACN) and Be Semiconductor Industries Nv- (BESI).
Its top 10 holdings account for approximately 5.6% of ISCF's total assets under management.
Performance and Risk
The ETF return is roughly 1.37% so far this year and was up about 6.49% in the last one year (as of 08/09/2024). In the past 52-week period, it has traded between $27.69 and $33.85.
ISCF has a beta of 0.96 and standard deviation of 17.05% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 1016 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 $71.77 billion in assets, Vanguard FTSE Developed Markets ETF has $131.35 billion. VXUS has an expense ratio of 0.08% and VEA 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 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?
The iShares International Small-Cap Equity Factor ETF (ISCF - Free Report) made its debut on 04/28/2015, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World ETFs 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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $527.92 million, this makes it one of the average sized ETFs in the Broad Developed World ETFs. ISCF is managed by Blackrock. This particular fund, before fees and expenses, 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.23%.
It has a 12-month trailing dividend yield of 4.06%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Banco De Sabadell Sa- (SAB) accounts for about 0.67% of total assets, followed by Vat Group Ag- (VACN) and Be Semiconductor Industries Nv- (BESI).
Its top 10 holdings account for approximately 5.6% of ISCF's total assets under management.
Performance and Risk
The ETF return is roughly 1.37% so far this year and was up about 6.49% in the last one year (as of 08/09/2024). In the past 52-week period, it has traded between $27.69 and $33.85.
ISCF has a beta of 0.96 and standard deviation of 17.05% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 1016 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 $71.77 billion in assets, Vanguard FTSE Developed Markets ETF has $131.35 billion. VXUS has an expense ratio of 0.08% and VEA 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 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.