Should iShares U.S. Small-Cap Equity Factor ETF (SMLF) Be on Your Investing Radar?

Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the iShares U.S. Small-Cap Equity Factor ETF (SMLF) is a passively managed exchange traded fund launched on 04/28/2015.The fund is sponsored by Blackrock. It has amassed assets over $1.57 billion, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.Why Small Cap BlendWith more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.CostsExpense 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 0.15%, making it one of the cheaper products in the space.It has a 12-month trailing dividend yield of 1.28%.Sector Exposure and Top HoldingsIt 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 Industrials sector--about 18.10% of the portfolio. Information Technology and Consumer Discretionary round out the top three.Looking at individual holdings, Applovin Corp Class A (APP) accounts for about 1.67% of total assets, followed by Microstrategy Inc Class A (MSTR) and Blk Csh Fnd Treasury Sl Agency (XTSLA).Performance and RiskSMLF seeks to match the performance of the MSCI USA Small Cap Diversified Multiple-Factor Index before fees and expenses. The STOXX U.S. Small-Cap Equity Factor Index (USD) composed of U.S. small-capitalization stocks that have favourable exposure to target style factors subject to constraints.The ETF has added about 4.06% so far this year and was up about 25.98% in the last one year (as of 01/20/2025). In the past 52-week period, it has traded between $57.70 and $74.15.The ETF has a beta of 1.12 and standard deviation of 21.07% for the trailing three-year period, making it a high risk choice in the space. With about 862 holdings, it effectively diversifies company-specific risk.AlternativesIShares U.S. Small-Cap Equity 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, SMLF 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 $72.86 billion in assets, iShares Core S&P Small-Cap ETF has $89.38 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.Bottom-LineWhile an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.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.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 U.S. Small-Cap Equity Factor ETF (SMLF): ETF Research Reports AppLovin Corporation (APP): Free Stock Analysis Report iShares Russell 2000 ETF (IWM): ETF Research Reports MicroStrategy Incorporated (MSTR): Free Stock Analysis Report iShares Core S&P Small-Cap ETF (IJR): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks