BlackRock, begun trading a new ETF, the iShares Edge MSCI Min Vol USA Small-Cap ETF (BATS: SMMV) on Friday, September 09, 2016. Here is a synopsis of the new ETF:

 

FUND INFORMATION:

Symbol: SMMV	Exchange: BATS
Name: iShares Edge MSCI Min Vol USA Small-Cap ETF	Net Expense Ratio: 0.20%

 

FUND OBJECTIVE:
The iShares Edge MSCI Min Vol USA Small-Cap ETF seeks to track the investment results of the MSCI USA Small Cap Minimum Volatility (USD) Index.

REFERENCE INDEX:
The MSCI USA Small Cap Minimum Volatility (USD) Index has been developed by MSCI Inc. (Index Provider), reflects the performance characteristics of small capitalization U.S. equities that in the aggregate are expected to have lower volatility characteristics relative to the small-capitalization U.S. equity market.

The Underlying Index is designed by selecting securities from the MSCI USA Small Cap Index (Parent Index), which is a capitalization-weighted index that represents approximately 14% of the free-float adjusted market capitalization in the United States, and then follows a rules-based methodology to optimize the Underlying Index and determine weights for securities that seeks to minimize total risk of the Parent Index. Under a rules-based methodology, securities and weighting of the Underlying Index are established based on pre-established parameters and discretionary factors are not relied on. Generally, rules-based methodologies will include specified requirements for security eligibility, maximum and minimum weightings by security and, in some cases by sector and country, established rules relating to handling or special dividends and other distributions and treatment of corporate events. In order to determine weightings by security within the Underlying Index, MSCI seeks to construct a portfolio of the lowest absolute volatility using its multi-factor risk model, and then the portfolio is further refined by an optimization tool that aims to determine the lowest absolute volatility based on the projected “riskiness” of securities in the Parent Index while subjected to constraints based on established minimum and maximum weightings of index constituents and sectors as well as factor constraints (for example, liquidity and financial leverage) as measured by MSCI. Components of the Underlying Index primarily include financials, healthcare and consumer discretionary companies. The components of the Underlying Index, and the degree to which these components represent certain industries, are likely to change over time.

 

Fund Top Holdings (09/08/16):

Name	Symbol	Weight
TELEFLEX INC.	TFX	1.48%
JACK HENRY & ASSOCIATES INC.	JKHY	1.46%
POST PROPERTIES INC.	PPS	1.19%
VALIDUS HOLDINGS LTD.	VR	1.16%
ROYAL GOLD INC.	RGLD	1.11%
PINNACLE FOODS INC.	PF	1.08%
TWO HARBORS INVESTMENT REIT CORP	TWO	1.00%
BIO-RAD LABORATORIES INC. CL A	BIO	0.99%
MFA FINANCIAL INC.	MFA	0.97%
CBOE HOLDINGS INC.	CBOE	0.89%

 

 

Fund Sector Breakdown (09/08/16):

Financials	17.59%
Health Care	14.57%
Real Estate	13.82%
Consumer Discretionary	11.76%
Information Technology	11.11%
Industrials	10.45%
Consumer Staples	8.44%
Utilities	8.44%
Materials	3.09%
Telecommunications	0.59%

 

 

Useful Links:
SMMV Home Page

 

 

Category:

 

 

ETFtrack comment:
Here is a comment from Robert Nestor, Head of U.S. iShares Smart Beta at BlackRock:
“Minimum volatility ETFs are built for those primarily seeking risk reduction in all market environments, over the longer term. This fund applies the same time-tested approach to seek smaller-cap asset returns with lower volatility. It could appeal to those investors seeking a core U.S. small-cap position in their portfolios but also looking to manage risk.”