Today’s challenging market environment should have investors looking at more smart beta funds. As such, RBC iShares expanded its Smart Beta lineup with the launch of five U.S. single factor exchange traded funds (ETF).

Each ETF offers exposure to a distinct style of investing – Quality, Momentum, Value, and Size.  The five ETFs—collectively the “iShares Factor ETFs”—are listed in the table below and are expected to begin trading on the Toronto Stock Exchange today; the new iShares Factor ETFs will be managed by BlackRock Asset Management Canada Limited (“BlackRock Canada”), an indirect wholly-owned subsidiary of BlackRock, Inc.

New Funds:TickerManagement Fee1
  • iShares Edge MSCI USA Quality Factor Index ETF
XQLT0.30%
  • iShares Edge MSCI USA Momentum Factor Index ETF
XMTM0.30%
  • iShares Edge MSCI USA Value Factor Index ETF
XVLU0.30%
  • iShares S&P U.S. Small-Cap Index ETF
XSMC0.20%
  • iShares S&P U.S. Small-Cap Index ETF (CAD-Hedged)
XSMH0.20%

 

The iShares Factor ETFs will allow investors to implement their market views, tilt portfolios, and diversify risk, using persistent long-term drivers of returns long employed in portfolio construction. XQLT, XMTM, and XVLU track indices which measure the performance of securities in their corresponding broad market benchmarks that exhibit higher quality, risk-adjusted price momentum, and value characteristics, respectively, as determined by the index provider.  The addition of XSMC and XSMH further broadens RBC iShares’ comprehensive range of U.S. equity exposures, including total market, and large, mid, and small-capitalization exposure. The two new funds, XSMC and XMSH, will provide investors with low-cost access to the small-capitalization segment of the U.S. equity market.

Today’s launch complements iShares’ existing factor lineup, which includes the Minimum Volatility and Multi-Factor series of ETFs, products designed to reduce risk, enhance investment returns, and add diversification. Globally, iShares Smart Beta products have US$156 billion in assets under management, as investors seek transparent, low-cost ways to manage risk and capture return potential.

“We know that modern portfolio construction is evolving as investors increasingly look across a range of strategies to achieve their investment objectives,” said Pat Chiefalo, Managing Director, Head of iShares, BlackRock Canada. “Factor investing is playing a crucial part in this evolution, as advancements in data and technology have made it easier for investors to implement their views on the areas of the market they believe will outperform, in a low-cost, transparent way. We believe the launch of these five U.S. single factor ETFs will deliver more optionality to help investors achieve those goals.”

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