Making its debut on 12/08/2014, smart beta exchange traded fund iShares MSCI ACWI Low Carbon Target ETF (CRBN) provides investors broad exposure to the World ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
Managed by Blackrock, CRBN has amassed assets over $475.50 M, 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
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 CRBN are 0.20%, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.12%.
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.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 2.54% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 11.83% of total assets under management.
Performance and Risk
The ETF has added about 24.26% so far this year and is up roughly 19.63% in the last one year (as of 12/11/2019). In the past 52-week period, it has traded between $99 and $127.28.
The ETF has a beta of 0.97 and standard deviation of 11.75% for the trailing three-year period, making it a low risk choice in the space. With about 1298 holdings, it effectively diversifies company-specific risk.
IShares MSCI ACWI Low Carbon Target ETF is an excellent option for investors seeking to outperform the World ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
IShares ESG MSCI USA Leaders ETF (SUSL) tracks MSCI USA EXTENDED ESG LEADERS INDEX and the iShares MSCI KLD 400 Social ETF (DSI) tracks MSCI KLD 400 Social Index. IShares ESG MSCI USA Leaders ETF has $1.70 B in assets, iShares MSCI KLD 400 Social ETF has $1.77 B. SUSL has an expense ratio of 0.10% and DSI charges 0.25%.
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.
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 ACWI Low Carbon Target ETF (CRBN): ETF Research Reports
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
iShares MSCI KLD 400 Social ETF (DSI): ETF Research Reports
iShares ESG MSCI USA Leaders ETF (SUSL): ETF Research Reports
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