IQ U.S. Small Cap ETF’s management team is rated Average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Silver. The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy's effective investment philosophy supports an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in volatility exposure and an underweight in yield exposure compared with category peers. High volatility exposure is attributed to companies with a higher standard deviation of returns. And a low yield exposure is rooted in holding fewer stocks with high dividend or buyback yields -- instead, typically holding stocks in an early stage of development. The team managing the passive strategy earns the strategy an Average People Pillar rating. The strategy's parent organization earns the firm an Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

A-Mark Precious Metals

Argan

Encore Wire

Centerspace REIT

Envestnet

Badger Meter

Victory Capital Holdings

Elme Communities

Granite Ridge Resources Inc

GEO Group

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. IQ U.S. Small Cap ETF earns an Above Average Process Pillar rating. 

The main driver of the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Respectable risk-adjusted performance also influences the rating. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. Lastly, the process is limited by its parent firm's subpar risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.8 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

 This strategy leans toward smaller, more growth-oriented companies than its average peer in the Small Value Morningstar Category. Analyzing additional factors, this strategy has consistently overweighted the volatility factor compared with Morningstar Category peers over the last few years, meaning it invests in stocks with a history of the higher standard deviation of returns. Such exposure tends to pay off when markets are hot and to be costly when they are not. In recent months, the strategy was more exposed to the Volatility factor compared with its Morningstar Category peers as well. The managers have also tended to underweight yield compared with peers during recent years. This is demonstrated by the portfolio's low exposure to dividends or buybacks. While companies with high yields provide steady income payments, they may cut payouts if their earnings decline. Similarly, in recent months, the strategy also had less exposure to the Yield factor than peers. In addition, this strategy has constantly held more illiquid stocks, evidenced by holdings' low trading volume, resulting in higher liquidity risk exposure than peers. Less-liquid stocks might offer strong returns to compensate for their risks, but they can be harder and more expensive to trade in bear markets. In recent months, the strategy also had less Liquidity factor exposure than its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in healthcare and technology relative to the category average by 8.7 and 5.1 percentage points, respectively. The sectors with low exposure compared to category peers are consumer cyclical and energy, underweight the average by 5.4 and 5.4 percentage points of assets, respectively. The strategy owns 494 securities and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 5.4% of the fund’s assets were concentrated in the top 10 fund holdings, as opposed to the category average's 28.1%. And finally, in terms of portfolio turnover, looking at year-over-year movements, 62% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Above Average

Process

New York Life’s team earns An Average People Pillar rating. The most important factor behind the rating is the firm's five-year retention rate of 87%. A low cost, with fees that rank in its category's cheapest quintile, also supports the rating. A higher expense ratio reduces net returns, so low costs give this team an advantage. Lastly, the rating is limited by the parent firm's five-year success ratio of 44%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median return for the period. The parent's subpar success ratio suggests that the firm could do better across its fund lineup.

Average

People

New York Life Investments' collection of autonomous investment boutiques will have a new leader in May 2023, and it will take time to assess his impact. The firm keeps its Average Parent rating.
New York Life, the insurance giant that owns NYL Investments, tapped Naïm Abou-Jaoudé to be the asset manager's CEO after the previous CEO departed. Abou-Jaoudé inherits a firm that has grown by building internally and through acquisition. The firm offers mandates in partnership with 13 different asset managers--eight of which are wholly or partially owned affiliates – through several global outlets. Most U.S. funds fall under the established MainStay brand, whereas IndexIQ oversees a growing lineup of ETFs managed both internally and by other affiliates. Candriam, at which Abou-Jaoudé has been CEO even prior to its 2014 acquisition by NYL Investments, takes the lead in Europe through its own offerings and through those subadvised by other boutiques.
Plenty of these capabilities are compelling, with Candriam and fellow affiliates MacKay Shields and Ausbil sporting standout teams in several wheelhouses. Yet many of the boutiques have also struggled with managing bloated lineups or with improving lagging teams. NYL Investments hasn't shied from changing subadvisors or merging platforms and doesn't have a spotless record of managing capacity or of avoiding trendy offerings.

Parent

IQ Chaikin U.S. Small Cap ETF

CSML tracks an equal-weighted index of small US companies selected by value, growth, technical, and sentiment factors.

Direxion Daily AAPL Bull 1.5X Shares

Direxion Daily AMZN Bull 1.5X Shares

Global X Next Emerging & Frontier ETF

Global X Emerging Markets ETF

FlexShares ESG & Climate Emerging Markets Core Index Fund

Direxion Daily GOOGL Bull 1.5X Shares

Direxion Daily MSFT Bull 1.5X Shares

Direxion Daily NVDA Bull 1.5X Shares

ProShares S&P 500 Bond ETF

SPDR S&P 500 ETF Trust

Direxion Daily TSLA Bull 1.5X Shares

Global X Data Center REITs & Digital Infrastructure ETF

FT Cboe Vest International Equity Buffer ETF - June

VanEck Future of Food ETF

Global X Data Center & Digital Infrastructure ETF

Innovator Equity Defined Protection ETF - 2 Yr to April 2026

Innovator Premium Income 9 Buffer ETF - April

Innovator Premium Income 15 Buffer ETF - April

PGIM US Large-Cap Buffer 12 ETF - April

AllianzIM US Equity Buffer15 Uncapped Apr ETF

Even Herd Long Short ETF

PGIM US Large-Cap Buffer 20 ETF - Apr

During the week, a total of 16 new ETFs debuted on the U.S. markets. These included launches from AllianzIM, ProShares, Split Rock Trading, River1 Asset Management, Rayliant, Strategas, and Alger.

This Week in ETFs: Innovator Adds 3 New ETFs

NEW YORK--(BUSINESS WIRE)--IndexIQ is announcing a planned change to its lineup of Exchange Traded Funds.

IndexIQ Announces Change to ETF Lineup

Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the IQ Chaikin U.S. Small Cap ETF (CSML) is a passively managed exchange traded fund launched on 05/16/2017.

Should IQ Chaikin U.S. Small Cap ETF (CSML) Be on Your Investing Radar?

Making its debut on 05/16/2017, smart beta exchange traded fund IQ Chaikin U.S. Small Cap ETF (CSML) provides investors broad exposure to the Style Box - Small Cap Blend category of the market.

Is IQ Chaikin U.S. Small Cap ETF (CSML) a Strong ETF Right Now?

WisdomTree US Smallcap Quality Dividend Growth Fund

O'Shares US Small-Cap Quality Dividend ETF

SPDR S&P 600 Small Cap ETF

SPDR SSGA US Small Cap Low Volatility Index ETF

WisdomTree Bloomberg US Dollar Bullish Fund

Invesco S&P SmallCap Low Volatility ETF

The small-cap space has lately fared better than the S&P 500.

6 Reasons Why You Should Tap Small-Cap ETFs Now

ETF Trends CEO Tom Lydon discussed the IQ Chaikin U.S. Small Cap ETF (CSML) on this week's “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show. CSML seeks investment results that track, before fees and expenses, the price and yield performance of the NASDAQ Chaikin Power U.S. Small Cap Index.

ETF of the Week: The IQ Chaikin U.S. Small Cap ETF (CSML)

Getting smart beta exposure doesn't need to be an expensive proposition with funds like the IQ Chaikin U.S. Small Cap ETF (CSML). The fund seeks investment results that track the price and yield performance of its underlying index, the Nasdaq Chaikin Power US Small Cap Index.

Smart Beta ETFs Need Not Be Expensive

With 10-year Treasury yields still on the upswing, some market observers are talking about a resurgent U.S. dollar. One way for investors to come out on top of that situation is with domestically focused small cap strategies such as the IQ Chaikin U.S. Small Cap ETF (NasdaqGM: CSML).

Betting on a Stronger U.S. Dollar?

Investors may want to look toward small cap stocks and the IQ Chaikin U.S. Small Cap ETF (NasdaqGM: CSML). CSML brings a layered factor approach to tapping small caps.

‘CSML': A Layered ETF Making Waves in the Small Cap Space

Small cap equities remain hot, but there's still some risk in the space. Investors can allay this concern with multi-factor strategies like the IQ Chaikin U.S. Small Cap ETF (NasdaqGM: CSML).

20 Metrics, 1 Goal: A Meticulous Small Cap Approach with ‘CSML'

WisdomTree U.S. SmallCap Dividend Fund

Invesco S&P SmallCap Information Technology ETF

These are go-go days for small-cap stocks and the related exchange-traded funds. The widely followed Russell 2000 Index jumped 18.29% in November, good for its best monthly performance on record.

3 Sizzling Small-Cap ETFs To Embrace Ahead Of 2021

Invesco S&P MidCap Low Volatility ETF

Best And Worst Q3 2020: Small-Cap Blend ETFs And Mutual Funds

News for IQ Chaikin U.S. Small Cap ETF ETF (CSML)