Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the iShares MSCI USA Small-Cap Min Vol Factor ETF (SMMV) is a passively managed exchange traded fund launched on 09/07/2016.
The fund is sponsored by Blackrock. It has amassed assets over $323.67 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 are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 1.50%.
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 17.40% of the portfolio. Financials and Industrials round out the top three.
Looking at individual holdings, Exelixis Inc (EXEL) accounts for about 1.78% of total assets, followed by Aptargroup Inc (ATR) and Murphy Usa Inc (MUSA).
The top 10 holdings account for about 14.11% 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 has added roughly 21.68% so far this year and was up about 28.22% in the last one year (as of 11/21/2024). In the past 52-week period, it has traded between $33.90 and $44.01.
The ETF has a beta of 0.79 and standard deviation of 14.24% for the trailing three-year period. With about 294 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Small-Cap 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 good 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 Small-Cap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $76.27 billion in assets, iShares Core S&P Small-Cap ETF has $90.21 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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Get it free >>iShares MSCI USA Small-Cap Min Vol Factor ETF (SMMV): ETF Research Reports
Exelixis, Inc. (EXEL) : Free Stock Analysis Report
Murphy USA Inc. (MUSA) : Free Stock Analysis Report
AptarGroup, Inc. (ATR) : Free Stock Analysis Report
iShares Russell 2000 ETF (IWM): ETF Research Reports
iShares Core S&P Small-Cap ETF (IJR): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
