The iShares Edge MSCI Multifactor Intl ETF (INTF) was launched on 04/28/2015, and is a smart beta exchange traded fund designed to offer 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.
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.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $1.15 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.30% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 3.68%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Taking into account individual holdings, Roche Holding Par Ag (ROG) accounts for about 3.47% of the fund's total assets, followed by Rio Tinto Plc (RIO) and Hitachi Ltd.
Its top 10 holdings account for approximately 22.6% of INTF's total assets under management.
Performance and Risk
The ETF has lost about -0.74% and is up about 9.56% so far this year and in the past one year (as of 02/12/2020), respectively. INTF has traded between $24.07 and $27.44 during this last 52-week period.
INTF has a beta of 0.90 and standard deviation of 11.95% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 219 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 $26.02 B in assets, Vanguard FTSE Developed Markets ETF has $79 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
Rio Tinto PLC (RIO) : Free Stock Analysis Report
Rogers Corporation (ROG) : Free Stock Analysis Report
Vanguard FTSE All-World ex-US ETF (VEU): ETF Research Reports
Vanguard FTSE Developed Markets ETF (VEA): ETF Research Reports
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