BlackRock has made changes to two ETFs within its iShares Multifactor suite. Effective Wednesday, the iShares US Equity Factor ETF (LRGF) will follow the STOXX US Equity Factor Index, while the iShares International Equity Factor ETF (INTF) will follow the STOXX International Equity Factor Index.
BlackRock has also changed LRGF’s and INTF’s expense ratios to 0.8% and 0.15%, respectively.
“It is great to see the commitment by iShares to grow within the smart beta ETF world and in particular with multifactor ETFs,” said VettaFi’s head of research Todd Rosenbluth. “Many advisors want to enjoy the security selection based on fundamentals usually found in active management but in a low cost and transparent manner. LRGF and INTF offer a strong choice.”
Factors look beyond standard market exposures, utilizing characteristics such as value, quality, momentum, low size, and low volatility to drive performance. LRGF and INTF combine traditional factor metrics such as dividend yields, gross profitability, and price momentum with newly identified analytics to enable deeper access to each of these five factors.
“Investors and advisors alike can benefit by implementing thoughtful exposure to factors when building portfolios across asset classes and sectors,” said Lukas Smart, managing director, head of U.S. iShares sustainable and factors at BlackRock, in a news release announcing the changes. “Our multifactor ETFs of mid and large-cap stocks enforce balanced, consistent positioning to five historically rewarded factors at a low cost. Integrating factors can increase opportunities for incremental returns and be a differentiating strategy for core holdings used for long-term goals such as retirement.”
Andrew Ang, head of factors, sustainable and solutions for BlackRock Systematic, added in the release: “The capital markets continue to evolve, improving our understanding of the underlying forces behind investment returns. Combining traditional and previously untapped factor insights, iShares’ Multifactor ETFs have innovated in how market participants can capture factors and has helped them construct diversified multifactor portfolios with efficiency, with affordability and with transparency.”
iShares’ factor ETF platform includes 44 products with nearly $164 billion in AUM.
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