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Should iShares MSCI USA SmallCap Min Vol Factor ETF (SMMV) Be on Your Investing Radar?

Style Box ETF report for SMMV

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This story originally appeared on Zacks

Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the iShares MSCI USA SmallCap Min Vol Factor ETF (SMMV) is a passively managed exchange traded fund launched on 09/07/2016.

- Zacks

The fund is sponsored by Blackrock. It has amassed assets over $842.13 million, 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

There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.

Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.20%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.19%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Healthcare sector--about 20.50% of the portfolio. Financials and Information Technology round out the top three.

Looking at individual holdings, Cubesmart Reit (CUBE) accounts for about 1.65% of total assets, followed by American Homes Rent Reit Class A (AMH) and Aptargroup Inc (ATR).

The top 10 holdings account for about 12.62% of total assets under management.

Performance and Risk

SMMV seeks to match the performance of the MSCI USA Small Cap Minimum Volatility (USD) Index before fees and expenses. The MSCI USA Small Cap Minimum Volatility (USD) Index comprises of small-capitalization U.S. equities that, in the aggregate, have lower volatility characteristics relative to the small-capitalization U.S. equity market.

The ETF return is roughly 11.37% so far this year and was up about 26.80% in the last one year (as of 09/21/2021). In the past 52-week period, it has traded between $28.50 and $39.03.

The ETF has a beta of 0.85 and standard deviation of 21.35% for the trailing three-year period. With about 359 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares MSCI USA SmallCap Min Vol Factor 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, SMMV is a sufficient 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 Russell 2000 ETF (IWM) and the iShares Core S&P SmallCap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $63.22 billion in assets, iShares Core S&P SmallCap ETF has $67.57 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.

Bottom-Line

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

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 USA SmallCap Min Vol Factor ETF (SMMV): ETF Research Reports

 

CubeSmart (CUBE): Free Stock Analysis Report

 

AptarGroup, Inc. (ATR): Free Stock Analysis Report

 

iShares Russell 2000 ETF (IWM): ETF Research Reports

 

American Homes 4 Rent (AMH): Free Stock Analysis Report

 

iShares Core S&P SmallCap ETF (IJR): ETF Research Reports

 

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