New iShares ETF Tracks Int'l Small Value

March 25, 2021

Today, BlackRock rolled out a small cap value international ETF that serves as a counterpart to a similar fund it launched last year that focuses on the U.S. market.

The iShares International Developed Small Cap Value Factor ETF (ISVL) tracks the FTSE Developed ex US ex Korea Small Cap Focused Value Index.

ISVL comes with an expense ratio of 0.30% and lists on Cboe Global Markets.

The fund’s index starts with the small cap segment of the FTSE Developed ex US ex Korea Small Cap Index and screens out the bottom 20% of companies in its selection universe based on liquidity, the top 20% for 12-month trailing realized volatility and the top 20% with regard to leverage.

From there, the methodology screens out companies with negative sentiment around earnings and those with negative price momentum, the prospectus says.

The remaining securities are scored and ranked based on three value metrics: their price-to-book, price-to-earnings and price-to-cash flow from operations.

Companies are selected until the new index contains 25% of the number of components of the parent index and then weighted based on float-adjusted market capitalization, with country weights kept within 10% of their weights in the parent index, according to the document, which notes that the index held 503 components at the end of 2020.

In October 2020, BlackRock launched the now-$103 million iShares U.S. Small Cap Value Factor ETF (SVAL), which tracks a Russell index that has a very similar methodology.

Contact Heather Bell at [email protected]

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