Daily ETF Watch: iShares Plans Int’l Funds

iShares files for two ETFs that target international equities but have very different focuses.

Reviewed by: Heather Bell
Edited by: Heather Bell

BlackRock’s iShares arm recently filed for two ETFs that will invest in international equities but implement different strategies. The iShares MSCI Global Impact ETF focuses on sustainability, while the iShares International Dividend Growth ETF will target companies that have historically increased their dividend payments on a regular basis.

The global impact ETF will track the MSCI ACWI Sustainable Impact Index, which covers companies that address at least one of the United Nations Sustainable Development Goals via their core businesses. The prospectus cites “nutritious food, treatment of major diseases, sanitary products, education, affordable housing, loans to small and medium size enterprises, alternative energy, energy efficiency, green building, sustainable water, and pollution prevention” as being among the goals targeted by the United Nations.

To be eligible, a company’s business activities related to the UN goals must account for at least 50% of its sales, and it must comply with basic environmental, sustainability and governance standards. The underlying index can include companies from developed or emerging markets.

The dividend growth ETF will track the Morningstar Global ex-US Dividend Growth Index, which is a dividend-weighted index that includes emerging as well as developed markets. Components must be dividend-paying companies that have grown their annual dividend steadily for at least five years and that have an earnings payout ratio below 75%, the prospectus said.

Interestingly, the index methodology screens the top 10% of companies based on dividend yield from its selection universe as a first step, presumably to filter out companies that are less likely to experience continued dividend growth.

The filings did not include tickers or expense ratios, and they did not mention which exchanges the funds would list on.

Contact Heather Bell at [email protected].

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.