Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the iShares U.S. Small-Cap Equity Factor ETF (SMLF) is a passively managed exchange traded fund launched on April 28, 2015.
The fund is sponsored by Blackrock. It has amassed assets over $4.29 billion, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.98%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector -- about 19.4% of the portfolio. Information Technology and Financials round out the top three.
Looking at individual holdings, Astera Labs Inc (ALAB) accounts for about 0.91% of total assets, followed by Emcor Group Inc (EME) and Flex Ltd (FLEX).
Performance and Risk
SMLF seeks to match the performance of the MSCI USA Small Cap Diversified Multiple-Factor Index before fees and expenses. The STOXX U.S. Small-Cap Equity Factor Index (USD) composed of U.S. small-capitalization stocks that have favourable exposure to target style factors subject to constraints.
The ETF return is roughly 20.55% so far this year and it's up approximately 31.05% in the last one year (as of 08/10/2026). In the past 52-week period, it has traded between $68.83 and $89.87.
The ETF has a beta of 1.08 and standard deviation of 19.51% for the trailing three-year period, making it a high risk choice in the space. With about 934 holdings, it effectively diversifies company-specific risk.
Alternatives
iShares U.S. Small-Cap Equity Factor ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, SMLF is a sufficient option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Morningstar Small-Cap ETF (VB) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While Vanguard Morningstar Small-Cap ETF has $82.71 billion in assets, iShares Core S&P Small-Cap ETF has $112.53 billion. VB has an expense ratio of 0.03% and IJR charges 0.06%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 U.S. Small-Cap Equity Factor ETF (SMLF): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).