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?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is sponsored by Blackrock. It has amassed assets over $944.90 million, making it one of the larger ETFs in the World ETFs. CRBN seeks to match the performance of the MSCI ACWI Low Carbon Target Index before fees and expenses.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.20% for CRBN, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.97%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
When you look at individual holdings, Apple Inc (AAPL) accounts for about 4.62% of the fund's total assets, followed by Nvidia Corp (NVDA) and Microsoft Corp (MSFT).
The top 10 holdings account for about 21.89% of total assets under management.
Performance and Risk
The ETF has lost about -1.36% and is up roughly 8.48% so far this year and in the past one year (as of 03/31/2025), respectively. CRBN has traded between $169.52 and $204.09 during this last 52-week period.
The ETF has a beta of 0.95 and standard deviation of 16.01% for the trailing three-year period, making it a low risk choice in the space. With about 1007 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 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 $12.74 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $22.49 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 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 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).
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