iShares is easily the biggest ETF sponsor globally, but other issuers are also holding their heads high now. Most sponsors are tapping lucrative areas as the market for plain vanilla ETFs looks to be maturing, compelling issuers to come up with novel themes. Most ETF launches are now based on the smart-beta theme (read: 2 New ETFs with Big Potential).
iShares has also started to regain its seemingly fading charm. The issuer has initiated quite a few ETFs with innovative ideas recently. As part of this effort, the mega issuer most recently launched five ETFs (read: Inside Two New IndexIQ ETFs Designed for Uncertain Market).
Notably, in its all five launches, iShares provides exposure to stocks with high scores on attributes like value, quality, momentum, and low size. Let’s take a look inside the funds.
iShares FactorSelect MSCI Global ETF (ACWF)
The newly launched passively managed ETF looks to track the performance of the MSCI ACWI Diversified Multi-Factor index. The fund currently holds 319 stocks from the 12 developed and emerging markets (read: Emerging Market ETFs: Any Bright Spots?).
The U.S. holds the highest weight with over 42% exposure followed by 12.8% occupied by Japan and 6.14% by China. All the other seven countries have less than 5.78% allocation each in the fund. Sector wise, Financials dominates the fund with 22% allocation, while Health Care (16.63%) and Industrials (16.43%) occupy the next two spots. The fund is low on utilities and energy, each carrying about 3% of the basket.
The fund has very low company-specific concentration risk with no single stock occupying more than 2.35% of the total. The fund charges 50 basis points as fees.
Competition: The newly launched product is likely to face competition from quite a number of funds prevalent in the global equities space. Still, a few specific ETFs can emerge as strong contenders. SPDR MSCI World Quality Mix ETF (QWLD – ETF report), Accuvest Global Opportunities ETF (ACCU) and FlexShares International Quality Dividend Defensive Index Fund (IQDF) are some of the examples.
iShares FactorSelect MSCI International ETF (INTF)
The fund seeks to track the MSCI World ex USA Diversified Multi-Factor Index to provide core international equity exposure. The fund holds a portfolio of 198 large and mid cap stocks from the developed markets outside North America. INTF focuses on an equal-weighted strategy with no stock forming more than 2.81% of the total fund assets.
