iShares launches Factor ETF series

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iShares has launched a series of exchange traded funds that offer exposure to specific factors intended to increase risk adjusted returns.

The four products, part of iShares’ Factor ETF series, focus on value, size, quality and momentum factors.

The ETFs add to the provider’s existing Smart Beta ETFs. MSCI provides the factor indices used by the new funds.

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, said: “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 $100bn currently benchmarked to them.”

The new funds are physically replicating and are priced to offer a total expense ratio of 0.30%.

ValueiShares MSCI World Value Factor UCITS ETFExposure to a sub-set of MSCI World stocks that capture undervalued stocks based on their fundamentals
SizeiShares MSCI World Size Factor UCITS ETFExposure to smaller capitalisation companies within the MSCI World investment universe
MomentumiShares MSCI World Momentum Factor UCITS ETFExposure to a sub-set of MSCI World stocks that have recently outperformed on a risk-adjusted basis
QualityiShares MSCI World Quality Factor UCITS ETFExposure to a sub-set of MSCI World stocks with strong balance sheets and stable earnings


Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 17 years he has been based in London writing about funds and investments. From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope. Jonathan was awarded Editor of the Year at the Professional Publishers Association (PPA) Independent Publisher Awards 2017. Shortlisted for the same in 2016, he was also shortlisted in 2017 and 2015 for the broader PPA Awards category Editor of the Year (Business Media).

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