A smart beta exchange traded fund, the iShares MSCI ACWI Low Carbon Target ETF (CRBN) debuted on 12/08/2014, and offers broad exposure to the World ETFs 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $992.14 million, which makes it one of the larger ETFs in the World ETFs. CRBN, before fees and expenses, 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
Since 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.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.20%.
It's 12-month trailing dividend yield comes in at 1.84%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Microsoft Corp (MSFT) accounts for about 3.96% of the fund's total assets, followed by Apple Inc (AAPL) and Nvidia Corp (NVDA).
The top 10 holdings account for about 21.12% of total assets under management.
Performance and Risk
Year-to-date, the iShares MSCI ACWI Low Carbon Target ETF has gained about 5.63% so far, and it's up approximately 15.18% over the last 12 months (as of 06/03/2025). CRBN has traded between $170.20 and $204.49 in this past 52-week period.
The fund has a beta of 0.94 and standard deviation of 16.64% for the trailing three-year period, which makes CRBN a low risk choice in this particular space. With about 1006 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.
Vanguard ESG U.S. Stock ETF (ESGV) tracks FTSE US ALL CAP CHOICE INDEX and the iShares ESG Aware MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index. Vanguard ESG U.S. Stock ETF has $10.17 billion in assets, iShares ESG Aware MSCI USA ETF has $13.38 billion. ESGV has an expense ratio of 0.09% 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 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 Vanguard ESG U.S. Stock ETF (ESGV): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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