Designed to provide broad exposure to the World ETFs category of the market, the iShares MSCI ACWI Low Carbon Target ETF (CRBN) is a smart beta exchange traded fund launched on 12/08/2014.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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
The fund is managed by Blackrock. CRBN has been able to amass assets over $997.30 million, making 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.
Operating expenses on an annual basis are 0.20% for this ETF, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.67%.
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.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 4.51% of total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).
The top 10 holdings account for about 22.13% of total assets under management.
Performance and Risk
The ETF has added about 21.50% so far this year and it's up approximately 27.68% in the last one year (as of 11/28/2024). In the past 52-week period, it has traded between $158.90 and $200.24.
The fund has a beta of 0.95 and standard deviation of 16.74% for the trailing three-year period, which makes CRBN a low risk choice in this particular space. With about 1142 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 Aware MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index and the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) tracks ----------------------------------------. IShares ESG Aware MSCI USA ETF has $14.33 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $19.15 billion. ESGU has an expense ratio of 0.15% and JEPQ charges 0.35%.
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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Get it free >>iShares MSCI ACWI Low Carbon Target ETF (CRBN): ETF Research Reports
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports
JPMorgan Nasdaq Equity Premium Income ETF (JEPQ): ETF Research Reports
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