Launched on 04/28/2015, the iShares Edge MSCI Multifactor Intl ETF (INTF) is a smart beta exchange traded fund offering broad exposure to the Broad Developed World ETFs category of the market.
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by Blackrock. It has amassed assets over $991.67 M, making it one of the larger ETFs in the Broad Developed World ETFs. This particular fund, 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.30% for INTF, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 3.40%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Amadeus It Group Sa (AMS) accounts for about 2.50% of total assets, followed by Axa Sa (CS) and Hitachi Ltd.
INTF's top 10 holdings account for about 18.11% of its total assets under management.
Performance and Risk
So far this year, INTF has lost about -8.76%, and is down about -6.51% in the last one year (as of 11/05/2018). During this past 52-week period, the fund has traded between $24.85 and $31.08.
The ETF has a beta of 0.97 and standard deviation of 14.12% for the trailing three-year period, making it a medium risk choice in the space. With about 236 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 $21.73 B in assets, Vanguard FTSE Developed Markets ETF has $67.01 B. VEU has an expense ratio of 0.11% and VEA charges 0.07%.
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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ISHARS-FS INTRN (INTF): ETF Research Reports
Credit Suisse Group (CS) : Free Stock Analysis Report
VANGD-FTSE DV M (VEA): ETF Research Reports
VANGD-FTSE AWLD (VEU): ETF Research Reports
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