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

Sweta Killa

The iShares MSCI ACWI Low Carbon Target ETF (CRBN) made its debut on 12/08/2014, and is a smart beta exchange traded fund that provides 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.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

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

CRBN is managed by Blackrock, and this fund has amassed over $473.55 M, which makes it one of the larger ETFs in the World ETFs. CRBN seeks to match the performance of the MSCI ACWI Low Carbon Target Index before fees and expenses.

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 this ETF are 0.20%, making it one of the least expensive products in the space.

CRBN's 12-month trailing dividend yield is 2.13%.

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, Apple Inc (AAPL) accounts for about 2.52% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).

The top 10 holdings account for about 11.74% of total assets under management.

Performance and Risk

The ETF has added roughly 23.94% so far this year and was up about 15.09% in the last one year (as of 11/19/2019). In the past 52-week period, it has traded between $99 and $126.28.

CRBN has a beta of 0.97 and standard deviation of 11.76% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 1301 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares MSCI ACWI Low Carbon Target ETF is an excellent option for investors seeking to outperform the World ETFs segment of the market. There are other ETFs in the space which investors could consider as well.

IShares ESG MSCI USA Leaders ETF (SUSL) tracks MSCI USA EXTENDED ESG LEADERS INDEX and the iShares MSCI KLD 400 Social ETF (DSI) tracks MSCI KLD 400 Social Index. IShares ESG MSCI USA Leaders ETF has $1.66 B in assets, iShares MSCI KLD 400 Social ETF has $1.70 B. SUSL has an expense ratio of 0.10% and DSI charges 0.25%.

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
 
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
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iShares MSCI KLD 400 Social ETF (DSI): ETF Research Reports
 
iShares ESG MSCI USA Leaders ETF (SUSL): ETF Research Reports
 
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