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Is iShares MSCI ACWI Low Carbon Target ETF (CRBN) a Strong ETF Right Now?

Zacks Equity Research
·4 mins read

Launched on 12/08/2014, the iShares MSCI ACWI Low Carbon Target ETF (CRBN) is a smart beta exchange traded fund offering broad exposure to the World ETFs category of the market.

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.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

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.

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

CRBN is managed by Blackrock, and this fund has amassed over $449.32 million, which makes it one of the larger ETFs in the World ETFs. This particular fund, before fees and expenses, seeks to match the performance of the MSCI ACWI Low Carbon Target Index.

The MSCI ACWI Low Carbon Target Index is designed to address two dimensions of carbon exposure ? carbon emissions and potential carbon emissions from fossil fuel reserves.

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.

Annual operating expenses for CRBN are 0.20%, which makes it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 2.67%.

Sector Exposure and Top Holdings

Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.

Taking into account individual holdings, Microsoft Corp (MSFT) accounts for about 3.03% of the fund's total assets, followed by Apple Inc (AAPL) and Amazon Com Inc (AMZN).

CRBN's top 10 holdings account for about 14.39% of its total assets under management.

Performance and Risk

Year-to-date, the iShares MSCI ACWI Low Carbon Target ETF has lost about -15.32% so far, and is down about -6.27% over the last 12 months (as of 04/27/2020). CRBN has traded between $89.44 and $133.75 in this past 52-week period.

CRBN has a beta of 0.99 and standard deviation of 19.49% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 1381 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares MSCI ACWI Low Carbon Target ETF is a reasonable option for investors seeking to outperform the World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.

IShares ESG MSCI EM ETF (ESGE) tracks MSCI Emerging Markets ESG Focus Index and the iShares ESG MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index. IShares ESG MSCI EM ETF has $2.77 billion in assets, iShares ESG MSCI USA ETF has $6.25 billion. ESGE has an expense ratio of 0.25% and ESGU charges 0.15%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the 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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iShares MSCI ACWI Low Carbon Target ETF (CRBN): ETF Research Reports
 
Microsoft Corporation (MSFT) : Free Stock Analysis Report
 
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Apple Inc. (AAPL) : Free Stock Analysis Report
 
iShares ESG MSCI EM ETF (ESGE): ETF Research Reports
 
iShares ESG MSCI USA ETF (ESGU): ETF Research Reports
 
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