Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the IQ Chaikin U.S. Small Cap ETF (CSML) is a passively managed exchange traded fund launched on 05/16/2017.
The fund is sponsored by Indexiq. It has amassed assets over $341.09 M, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.35%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.16%.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation to the Industrials sector--about 27.50% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, First Bancorp/puerto Rico (FBP) accounts for about 1.00% of total assets, followed by Renewable Energy Group Inc (REGI) and Office Depot Inc (ODP).
The top 10 holdings account for about 8.71% of total assets under management.
Performance and Risk
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.
The ETF has added roughly 12.88% so far this year and is down about -4.58% in the last one year (as of 04/03/2019). In the past 52-week period, it has traded between $21.19 and $29.80.
The ETF has a beta of 1.23 and standard deviation of 16.19% for the trailing three-year period. With about 203 holdings, it effectively diversifies company-specific risk.
IQ Chaikin U.S. Small Cap ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, CSML is a good option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P Small-Cap ETF (IJR) and the iShares Russell 2000 ETF (IWM) track a similar index. While iShares Core S&P Small-Cap ETF has $43.36 B in assets, iShares Russell 2000 ETF has $43.53 B. IJR has an expense ratio of 0.07% and IWM charges 0.19%.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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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IQ Chaikin U.S. Small Cap ETF (CSML): ETF Research Reports
First BanCorp. (FBP) : Free Stock Analysis Report
iShares Russell 2000 ETF (IWM): ETF Research Reports
iShares Core S&P Small-Cap ETF (IJR): ETF Research Reports
Office Depot, Inc. (ODP) : Free Stock Analysis Report
Renewable Energy Group, Inc. (REGI) : Free Stock Analysis Report
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