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Is ProShares Large Cap Core Plus (CSM) a Hot ETF Right Now?

Sweta Killa
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Launched on 07/13/2009, the ProShares Large Cap Core Plus (CSM) is a smart beta exchange traded fund offering broad exposure to the Hedge Fund ETFs category of the U.S. equity 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.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

CSM is managed by Profunds Group, and this fund has amassed over $759.01 M, which makes it the largest ETF in the Hedge Fund ETFs. CSM seeks to match the performance of the Credit Suisse 130/30 Large Cap Index before fees and expenses.

The Credit Suisse 130/30 Large-Cap Index is designed to replicate an investment strategy that establishes either long or short positions in certain of the 500 largest U.S. market cap equities by applying a rules-based ranking and weighting methodology detailed below. The design intends to provide an indexed representation of a quantitatively constructed 130/30 U.S. large-cap equity strategy.

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 CSM are 0.45%, which makes it the least expensive product in the space.

It's 12-month trailing dividend yield comes in at 1.28%.

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.

CSM's heaviest allocation is in the Information Technology sector, which is about 18.30% of the portfolio. Its Consumer Discretionary and Financials round out the top three.

Performance and Risk

CSM has lost about -0.02% so far this year, and as of 04/05/2018, is up about 15.78% in the last one year. In the past 52-week period, the fund has traded between $57.63 and $71.30.

The fund has a beta of 1.01 and standard deviation of 13.49% for the trailing three-year period. With about 335 holdings, it effectively diversifies company-specific risk.

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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