(SMLF) iShares MSCI USA Small-Cap - Ratings and Ratios

The iShares MSCI USA Small-Cap Multifactor ETF (SMLF) is designed to capture the performance of small-cap US stocks that exhibit a combination of desirable characteristics, including momentum, quality, value, and low volatility. By using an optimization process to select and weight its holdings, the fund aims to maximize exposure to these four target factors, providing a diversified portfolio of small-cap equities.

The funds investment strategy involves holding at least 80% of its assets in the component securities of its underlying index, as well as investments with similar economic characteristics. The remaining 20% can be allocated to derivatives such as futures, options, and swap contracts, as well as cash and cash equivalents, allowing for flexibility in managing the portfolio.

From a technical analysis perspective, SMLFs price action suggests a potential breakout opportunity. With its current price near the lower end of its 52-week range, and the SMA20 and SMA50 indicating a potential bullish crossover, the fund may be poised for a rebound. If the price breaks above its SMA20 and SMA50, it could signal a continuation of the uptrend, with a potential target near the 52-week high.

Considering the funds underlying fundamentals, the $1.766 billion AUM suggests a reasonable level of liquidity, which can help reduce trading costs. Given the funds focus on multifactor small-cap stocks, it is likely to be more sensitive to changes in market sentiment and economic conditions. As such, a forecast for SMLFs performance will depend on the interplay between these factors. Assuming a continued recovery in small-cap stocks, and a favorable economic environment, SMLF may be expected to outperform its peers in the Small Blend category. A potential price target could be around $70-75, representing a 7-15% upside from current levels.