BlackRock Launches Two New Factor-Based ETFs

DYNF is BlackRock’s first ETF that uses its namesake versus iShares.

FOVL Zeroes in on Value

With 2018’s year-end sell-offs in U.S. equities, investors are giving value investing a closer look in 2019. A byproduct of a shift to value is a focus on being selective and using due diligence as screeners to find the best-performing investments.

Branded under the iShares name, FOVL seeks to track an index derived from the Russell 1000 Index. The top 10 percent of constituents are screened out based on 12-month realized volatility followed by a screener that takes the top 10 percent of constituents with the most leverage.

According to the prospectus, companies with negative sentiment scores are sought for exclusion, which are based on the prospective earnings per share estimates for the current and following fiscal year. From there, FOVL gives the remaining selections a value score based on four value factor criteria; price-to-book, price-to-dividend, price-to-earnings and price-to-cash flow from operations.

40 of the highest-scoring companies make up the target composition of FOVL and are equally weighted. Rebalancing occurs after monthly reviews of the original 40 stocks and adjustments are made as necessary.

That fund comes with an expense ratio of 0.25 percent and also lists on the NYSE Arca.

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