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%.

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


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