BlackRock has launched a quartet of factor-based iShares ETFs this year and each one has already gathered more than $100 million in assets thanks in part to a partnership with Arizona State Retirement System.
The new ETFs are iShares MSCI USA Quality Factor ETF (NYSEArca: QUAL), Shares MSCI USA Size Factor ETF (NYSEArca: SIZE), iShares MSCI USA Value Factor ETF (NYSEArca: VLUE) and iShares MSCI USA Momentum Factor ETF (NYSEArca: MTUM). [New ETF Puts Warren Buffett’s Approach to Work]
BlackRock and other ETF providers continue to expand their lineup of funds that weight stocks by fundamental factors rather than market cap. The firm this year has also introduced iShares Enhanced U.S. Large-Cap ETF (NYSEArca: IELG and iShares Enhanced US Small-Cap ETF (NYSEArca: IESM). These two actively managed ETFs seek to provide competitive long-term risk-adjusted returns relative to traditional indices that weight by market cap. [iShares Enters the Actively Managed ETF Arena]
“These products were designed in partnership with Registered Investment Advisors (RIAs) and institutional investors, specifically public pensions, to provide a broader range of solutions to help manage equity exposures and risk,” BlackRock said. [iShares Launches ‘Quality Factor’ ETF]
“Factors are a set of investment characteristics which explain the risk and return behavior of an asset or stock,” it added. “Every asset has a unique set of factor exposures — such as quality, value, size and momentum — that influence the asset’s return. Factor investing is a well-documented, differentiated approach to traditional market- capitalization investing.”
The four factor-based ETFs follow MSCI Risk Premia Indices and charge expense ratios of 0.15%.
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