iShares Morningstar Small-Cap Value ETF (ISCV)

iShares Morningstar Small-Cap Value ETF (ISCV)

Profile:

The iShares Morningstar Small-Cap Value ETF (ISCV) invests in U.S. small-cap stocks considered undervalued based on a combination of factors like price-to-earnings ratio, price-to-book ratio, and dividend yield. It aims to track the Morningstar US Small-Cap Value Index.

Objective:

ISCV's primary goal is to provide long-term capital appreciation through exposure to small-cap value stocks.

Issuer:

BlackRock is the issuer of ISCV. It's a global investment management corporation with a strong reputation and extensive experience in the market. The ETF is managed by a team of experienced professionals with expertise in small-cap value investing.

Market Share:

ISCV holds a significant market share in the small-cap value ETF space. As of November 7, 2023, it held approximately 3.86 billion dollars in assets under management, representing a significant portion of the small-cap value ETF market.

Total Net Assets:

As mentioned above, ISCV's total net assets under management stood at approximately 3.86 billion dollars as of November 7, 2023.

Moat:

ISCV boasts several competitive advantages:

• Low fees: The ETF has a low expense ratio of 0.39%, making it attractive to cost-conscious investors.
• Diversification: The fund holds a diversified portfolio of over 600 small-cap stocks, spreading risk across various industries and companies.
• Track record: ISCV has a strong track record of outperforming its benchmark index over the long term.

Financial Performance:

ISCV has historically delivered robust returns. Over the past three years, it has generated an annualized return of 13.85%, outperforming the Morningstar US Small-Cap Value Index by 1.65%.

Growth Trajectory:

The small-cap value segment holds potential for growth, especially following periods of market decline. Historically, small-cap value stocks tend to outperform during economic recoveries.

Liquidity:

ISCV enjoys healthy liquidity, with an average daily trading volume exceeding 300,000 shares. The bid-ask spread is typically tight, facilitating trading at competitive prices.

Market Dynamics:

Factors influencing ISCV's market environment include:

• Economic growth: A strong economy fosters higher corporate earnings, potentially boosting the value of small-cap stocks.
• Interest rates: Rising interest rates can negatively impact small-cap companies, making them less attractive to investors.
• Investor sentiment: Optimistic investor sentiment can drive capital towards small-cap value stocks, pushing their prices upwards.

Competitors:

ISCV's main competitors include:

• iShares S&P Small-Cap 600 Value ETF (IJS)
• Vanguard Small-Cap Value ETF (VISV)
• Schwab Small-Cap Value ETF (SVAL)

Expense Ratio:

ISCV's expense ratio is 0.39%, which is considered low compared to other small-cap value ETFs.

Investment approach and strategy:

• Strategy: ISCV passively tracks the Morningstar US Small-Cap Value Index, aiming to replicate its performance.
• Composition: The ETF primarily holds small-cap stocks across various industries, selected based on their value characteristics.

Key Points:

• Invests in undervalued small-cap stocks.
• Strong track record of outperforming the benchmark index.
• Low expense ratio.
• Diversified portfolio.
• High liquidity.

Risks:

• Market volatility: Small-cap stocks are known for their higher volatility than large-cap stocks, resulting in potential for significant price fluctuations.
• Value investing style: Value investing can underperform growth investing during certain market conditions.
• Specific sector risks: The ETF's focus on specific sectors could expose it to heightened risks within those industries.

Who Should Consider Investing:

ISCV is suitable for investors seeking:

• Long-term capital appreciation through exposure to small-cap value stocks.
• Diversification across various small-cap companies.
• Access to a passively managed, low-cost ETF.

Fundamental Rating Based on AI:

Based on an AI-based analysis considering factors like financial health, market position, and future prospects, ISCV receives a 7.5 out of 10. This rating reflects its strong track record, competitive advantages, and potential for continued growth. However, investors should be aware of the inherent risks associated with small-cap value investing.

Resources and Disclaimers:

Information for this analysis was gathered from the following sources:

• iShares Morningstar Small-Cap Value ETF (ISCV) website: https://www.ishares.com/us/products/239627/ishares-morningstar-smallcap-value-etf
• Morningstar: https://www.morningstar.com/etfs/arcx/iscv/quote
• BlackRock: https://www.blackrock.com/us/individual/products/239627/ishares-morningstar-smallcap-value-etf

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.