BlackRock Asset Management Canada’s iShares business is launching a suite of minimum volatility exchange-traded funds to the Canadian marketplace.
This is the first time investors in Canada have access to the full broad market suite of minimum volatility ETFs including Canada, US, developed international, global and emerging markets.
All five of the iShares ETFs will begin trading on the Toronto Stock Exchange today.
“With the uncertainty in today’s markets, investors want to capture potential market upside but still protect their assets,” says Mary Anne Wiley, managing director, head of iShares, BlackRock Canada. “To help investors get off the sidelines, we have introduced the new iShares Minimum Volatility Funds which offer investors a unique opportunity to retain equity exposure in their portfolio while seeking to reduce the overall equity risk in these turbulent times. It’s a compelling option for investors looking for a contrast or complement to other portfolio management strategies and will also optimize risk-adjusted returns over the long term.”
The new offering is in direct response to investor demand and extends iShares current line-up of market-cap and fundamentally-weighted broad market product suites.
The new iShares Minimum Volatility Funds can help investors reduce overall portfolio risk while retaining exposure to the equity marketplace. While the typical market portfolio seeks to balance risk by including exposures to higher and lower risk equities, minimum volatility ETFs seek to provide steady performance that helps insulate against spikes in returns.
The new ETFs are:
iShares MSCI Canada Minimum Volatility Index Fund
iShares MSCI USA Minimum Volatility Index Fund
iShares MSCI EAFE Minimum Volatility Index Fund
iShares MSCI Emerging Markets Minimum Volatility Index Fund
iShares MSCI All Country World Minimum Volatility Index Fund
The ETFs track minimum volatility indexes created by MSCI. These indexes are constructed by optimising the respective parent MSCI indexes, which are capitalisation-weighted, by determining weights for securities in the indexes that result in portfolios with the lowest total risk. Index constraints such as country, sector and style exposures are applied to the optimisation to ensure diversification and investability, while broadly matching the profile of the corresponding cap-weighted MSCI index. The new funds can help provide a portfolio with downside protection while seeking to maintain some exposure to the upside price movement.