iShares Launches Smart Beta ETF Range

October 06, 2014

iShares has launched four new smart beta exchange traded funds tracking MSCI indexes, based on value, size, quality and momentum. They are intended to give investors access to sources of potential additional return in their passive portfolios.

The ETF provider currently offers a range of smart beta ETFs, which includes a minimum volatility factor range that aims to provide broad, diversified market exposures with reduced volatility.

Sara Shores, global head of Smart Beta for BlackRock, said: “Our Smart Beta strategies are simply the next step in the 40 year evolution of passive investing at BlackRock. Through the iShares Factor ETFs, investors can now access sources of potential additional return in a passively implemented portfolio.  Complementing our minimum volatility products, our new Factor funds allow investors to emphasise specific, high conviction investment views or construct a broadly diversified portfolio along factor dimensions with the goal of outperforming the broad equity market.”

Deborah Yang, head of MSCI’s index business in EMEA and India, added, “We are delighted to license an innovative set of MSCI Factor Indexes to iShares for their new ETF Factor series. Built on a solid research framework and leveraging 40 years of factor expertise, MSCI's family of factor indexes has been widely adopted by investors, with over $100 (€80) billion currently benchmarked to them.”

The physically backed ETFs all have a total expense ratio of 0.30 percent and are called:

  • iShares MSCI World Value Factor UCITS ETF, which offers exposure to a sub-set of MSCI World stocks that capture undervalued stocks based on their fundamentals.
  • iShares MSCI World Size Factor UCITS ETF, which offers smaller capitalisation companies within the MSCI World investment universe.
  • iShares MSCI World Momentum Factor UCITS ETF, which offers exposure to a sub-set of MSCI World stocks that have recently outperformed on a risk-adjusted basis.
  • iShares MSCI World Quality Factor UCITS ETF, which gives investors exposure to a sub-set of MSCI World stocks with strong balance sheets and stable earnings.



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