With the success of U.S.-focused factor-driven ETFs, fund issuers are partnering with MSCI to bring international offerings to market. Last year, State Street’s (NYSE: STT) State Street Global Advisors partnered with MSCI on six single-country multi-factor ETFs, including the SPDR MSCI Spain Quality Mix ETF (NYSEArca: QESP) and the SPDR MSCI Australia Quality Mix ETF (NYSEArca: QAUS), as well as the SPDR MSCI EAFE Quality Mix ETF (NYSEArca: QEFA) and SPDR MSCI Emerging Markets Quality Mix ETF (NYSEArca: QEMM). [Qualifying Quality in Emerging Markets]
Earlier this month, iShares, the world’s largest ETF issuer, introduced the iShares MSCI International Developed Momentum Factor ETF (NYSEArca: IMTM) and the iShares MSCI International Developed Quality Factor ETF (NYSEArca: IQLT), both of which track international MSCI indexes that emphasize the quality factor.
The quality factor “captures excess returns to stocks that are characterized by low debt, stable earnings growth and other ‘quality’ metrics,” according to MSCI.
At the end of last year, 13% of all U.S. ETF assets, a number north of $2 trillion, were allocated to funds tracking MSCI indexes, according to ETF data provider and research firm ETFGI. http://etfgi.com/
Tom Lydon’s clients own shares of EEM and EFA.