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Is iShares MSCI ACWI Low Carbon Target ETF (CRBN) a Strong ETF Right Now?

Zacks Equity Research
·4 min read

Launched on 12/08/2014, the iShares MSCI ACWI Low Carbon Target ETF (CRBN) is a smart beta exchange traded fund offering broad exposure to the World ETFs category of the market.

What Are Smart Beta ETFs?

The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.

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.

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Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.

Fund Sponsor & Index

Managed by Blackrock, CRBN has amassed assets over $918.47 million, making it one of the larger ETFs in the World ETFs. Before fees and expenses, this particular fund 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

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Operating expenses on an annual basis are 0.20% for CRBN, making it one of the least expensive products in the space.

CRBN's 12-month trailing dividend yield is 2.06%.

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.

Looking at individual holdings, Apple Inc (AAPL) accounts for about 4.06% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).

CRBN's top 10 holdings account for about 15.95% of its total assets under management.

Performance and Risk

Year-to-date, the iShares MSCI ACWI Low Carbon Target ETF has lost about -14.35% so far, and is down about -9.21% over the last 12 months (as of 08/22/2022). CRBN has traded between $133.43 and $176.38 in this past 52-week period.

The fund has a beta of 0.93 and standard deviation of 22.34% for the trailing three-year period, which makes CRBN a low risk choice in this particular space. With about 1333 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares MSCI ACWI Low Carbon Target ETF is a reasonable option for investors seeking to outperform the World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.

IShares ESG Aware MSCI EAFE ETF (ESGD) tracks MSCI EAFE ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EAFE ETF has $6.69 billion in assets, iShares ESG Aware MSCI USA ETF has $23.78 billion. ESGD has an expense ratio of 0.20% and ESGU charges 0.15%.

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.

Bottom Line

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 ESG Aware MSCI EAFE ETF (ESGD): ETF Research Reports
 
iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports
 
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