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Is FlexShares Credit-Scored US Corporate Bond ETF (SKOR) a Strong ETF Right Now?
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The FlexShares Credit-Scored US Corporate Bond ETF (SKOR - Free Report) made its debut on 11/12/2014, and is a smart beta exchange traded fund that provides broad exposure to the Investment Grade Corporate Bond 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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
Managed by Flexshares, SKOR has amassed assets over $490.65 million, making it one of the average sized ETFs in the Investment Grade Corporate Bond ETFs. This particular fund seeks to match the performance of the Northern Trust Credit-Scored US Corporate Bond Index before fees and expenses.
The Northern Trust US Corporate Bond Quality Value Index measures the performance of a diversified universe of intermediate maturity, US - dollar denominated bonds of companies with investment grade credit quality, favourable valuations and enhanced short-term and long-term solvency.
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.
Annual operating expenses for SKOR are 0.15%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 4.85%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Cash accounts for about 0.63% of the fund's total assets, followed by Citigroup Inc Callable Notes Variable 25/may/2034-6.17%-5-25-2034 (C - Free Report) and Gilead Sciences Inc Callable Notes Fixed 3.65%-3.65%-3-1-2026 (GILD - Free Report) .
Its top 10 holdings account for approximately 3.23% of SKOR's total assets under management.
Performance and Risk
So far this year, SKOR has added roughly 1.72%, and was up about 6.79% in the last one year (as of 02/28/2025). During this past 52-week period, the fund has traded between $46.74 and $49.21.
SKOR has a beta of 0.23 and standard deviation of 5.08% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 1733 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares Credit-Scored US Corporate Bond ETF is a reasonable option for investors seeking to outperform the Investment Grade Corporate Bond ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
SPDR Portfolio Intermediate Term Corporate Bond ETF (SPIB - Free Report) tracks Bloomberg Barclays Intermediate U.S. Corporate Index and the Vanguard Intermediate-Term Corporate Bond ETF (VCIT - Free Report) tracks Bloomberg Barclays U.S. 5-10 Year Corporate Bond Index. SPDR Portfolio Intermediate Term Corporate Bond ETF has $9.99 billion in assets, Vanguard Intermediate-Term Corporate Bond ETF has $49.35 billion. SPIB has an expense ratio of 0.04% and VCIT charges 0.03%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Investment Grade Corporate Bond 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 FlexShares Credit-Scored US Corporate Bond ETF (SKOR) a Strong ETF Right Now?
The FlexShares Credit-Scored US Corporate Bond ETF (SKOR - Free Report) made its debut on 11/12/2014, and is a smart beta exchange traded fund that provides broad exposure to the Investment Grade Corporate Bond 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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
Managed by Flexshares, SKOR has amassed assets over $490.65 million, making it one of the average sized ETFs in the Investment Grade Corporate Bond ETFs. This particular fund seeks to match the performance of the Northern Trust Credit-Scored US Corporate Bond Index before fees and expenses.
The Northern Trust US Corporate Bond Quality Value Index measures the performance of a diversified universe of intermediate maturity, US - dollar denominated bonds of companies with investment grade credit quality, favourable valuations and enhanced short-term and long-term solvency.
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.
Annual operating expenses for SKOR are 0.15%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 4.85%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Cash accounts for about 0.63% of the fund's total assets, followed by Citigroup Inc Callable Notes Variable 25/may/2034-6.17%-5-25-2034 (C - Free Report) and Gilead Sciences Inc Callable Notes Fixed 3.65%-3.65%-3-1-2026 (GILD - Free Report) .
Its top 10 holdings account for approximately 3.23% of SKOR's total assets under management.
Performance and Risk
So far this year, SKOR has added roughly 1.72%, and was up about 6.79% in the last one year (as of 02/28/2025). During this past 52-week period, the fund has traded between $46.74 and $49.21.
SKOR has a beta of 0.23 and standard deviation of 5.08% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 1733 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares Credit-Scored US Corporate Bond ETF is a reasonable option for investors seeking to outperform the Investment Grade Corporate Bond ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
SPDR Portfolio Intermediate Term Corporate Bond ETF (SPIB - Free Report) tracks Bloomberg Barclays Intermediate U.S. Corporate Index and the Vanguard Intermediate-Term Corporate Bond ETF (VCIT - Free Report) tracks Bloomberg Barclays U.S. 5-10 Year Corporate Bond Index. SPDR Portfolio Intermediate Term Corporate Bond ETF has $9.99 billion in assets, Vanguard Intermediate-Term Corporate Bond ETF has $49.35 billion. SPIB has an expense ratio of 0.04% and VCIT charges 0.03%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Investment Grade Corporate Bond 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.