Designed to provide broad exposure to the Broad Developed World ETFs category of the market, the iShares Edge MSCI Multifactor Intl ETF (INTF) is a smart beta exchange traded fund launched on 04/28/2015.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $1.02 B, this makes it one of the larger ETFs in the Broad Developed World ETFs. INTF is managed by Blackrock. INTF, before fees and expenses, seeks to match the performance of the MSCI World ex USA Diversified Multi-Factor Index.
The MSCI World ex USA Diversified Multi-Factor Index is designed to select equity securities from MSCI World ex USA Index that have high exposure to four investment style factors: value, quality, momentum and low size, while maintaining a level of risk similar to that of the Parent Index.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for INTF are 0.30%, which makes it one of the cheaper products in the space.
INTF's 12-month trailing dividend yield is 3.26%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Roche Holding Par Ag (ROG) accounts for about 3.49% of total assets, followed by Hitachi Ltd and Woolworths Group Ltd (WOW).
INTF's top 10 holdings account for about 20.63% of its total assets under management.
Performance and Risk
The ETF return is roughly 7.18% and is down about -8.29% so far this year and in the past one year (as of 10/03/2019), respectively. INTF has traded between $22.95 and $27.58 during this last 52-week period.
The ETF has a beta of 0.90 and standard deviation of 11.87% for the trailing three-year period, making it a medium risk choice in the space. With about 237 holdings, it effectively diversifies company-specific risk.
IShares Edge MSCI Multifactor Intl ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard FTSE All-World ex-US ETF (VEU) tracks FTSE All-World ex US Index and the Vanguard FTSE Developed Markets ETF (VEA) tracks FTSE Developed All Cap ex US Index. Vanguard FTSE All-World ex-US ETF has $23.16 B in assets, Vanguard FTSE Developed Markets ETF has $70.17 B. VEU has an expense ratio of 0.09% and VEA charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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iShares Edge MSCI Multifactor Intl ETF (INTF): ETF Research Reports
Rogers Corporation (ROG) : Free Stock Analysis Report
Vanguard FTSE Developed Markets ETF (VEA): ETF Research Reports
Vanguard FTSE All-World ex-US ETF (VEU): ETF Research Reports
WideOpenWest, Inc. (WOW) : Free Stock Analysis Report
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