Launched on 09/07/2016, the iShares MSCI USA Small-Cap Min Vol Factor ETF (SMMV) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $787 million, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
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 2.04%.
Sector Exposure and Top Holdings
It is important to delve into an ETF’s holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Healthcare sector–about 18.70% of the portfolio. Financials and Industrials round out the top three.
Looking at individual holdings, Murphy Usa Inc (MUSA) accounts for about 2.01% of total assets, followed by Landstar System Inc (LSTR) and Chemed Corp (CHE).
The top 10 holdings account for about 13.63% 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 lost about -3.67% so far this year and is down about -1.59% in the last one year (as of 11/10/2023). In the past 52-week period, it has traded between $32.10 and $36.77.
The ETF has a beta of 0.79 and standard deviation of 14.54% for the trailing three-year period. With about 326 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 reasonable 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 $49.20 billion in assets, iShares Core S&P Small-Cap ETF has $63.69 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 Small-Cap Min Vol Factor ETF (SMMV): ETF Research Reports
Murphy USA Inc. (MUSA) : Free Stock Analysis Report
Chemed Corporation (CHE) : Free Stock Analysis Report
iShares Russell 2000 ETF (IWM): ETF Research Reports
Landstar System, Inc. (LSTR) : Free Stock Analysis Report
iShares Core S&P Small-Cap ETF (IJR): ETF Research Reports
