Is iShares Paris-Aligned Climate MSCI USA ETF (PABU) a Strong ETF Right Now?

The iShares Paris-Aligned Climate MSCI USA ETF (PABU) was launched on 04/08/2022, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Blend category of the market.What Are Smart Beta ETFs?The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.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.While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.Fund Sponsor & IndexBecause the fund has amassed over $2.02 billion, this makes it one of the larger ETFs in the Style Box - All Cap Blend. PABU is managed by Blackrock. This particular fund, before fees and expenses, seeks to match the performance of the MSCI USA CLMT PARIS ALGN BNC EXT SLCT ID.The MSCI USA Climate Paris Aligned Benchmark Extended Select Index composed of U.S. large & mid-capitalization stocks designed to be compatible with the objectives of the Paris Agreement by following a decarbonization trajectory, reducing exposure to climate-related transition & physical risks & increasing exposure to companies favourably positioned for the transition to a low-carbon economy.Cost & Other ExpensesSince 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 PABU are 0.10%, which makes it one of the least expensive products in the space.It's 12-month trailing dividend yield comes in at 1.07%.Sector Exposure and Top HoldingsEven 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.For PABU, it has heaviest allocation in the Information Technology sector --about 36.70% of the portfolio --while Financials and Healthcare round out the top three.Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 7.34% of total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).The top 10 holdings account for about 40.24% of total assets under management.Performance and RiskThe ETF has lost about -6.29% and is up roughly 10.42% so far this year and in the past one year (as of 03/18/2025), respectively. PABU has traded between $53.24 and $67.53 during this last 52-week period.The fund has a beta of 1.04 and standard deviation of 18.26% for the trailing three-year period. With about 208 holdings, it effectively diversifies company-specific risk.AlternativesIShares Paris-Aligned Climate MSCI USA ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Blend 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 $12.97 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $22.64 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 Style Box - All Cap Blend.Bottom LineTo 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.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report iShares Paris-Aligned Climate MSCI USA ETF (PABU): 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 ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks