BlackRock has licensed the MSCI USA Quality Index as the basis for a new exchange-traded fund, the iShares MSCI USA Quality Factor ETF.
Diana Tidd, managing director and head of the MSCI index business in the Americas, says: “We have seen increasing demand from our clients for our Risk Premia indices, reflecting the growing trend for strategy indexing. BlackRock’s latest addition of the MSCI USA Quality Index is proof of that continued trend and we look forward to working with them as they expand their iShares MSCI Factor ETF suite.”
The MSCI USA Quality Index is based on its parent index (the MSCI USA Index) and includes large and mid cap stocks in the US equity market. The MSCI Quality Indices are designed to reflect a quality growth strategy by identifying stocks with high quality scores based on three main fundamental variables: high return on equity (ROE), stable year-over-year earnings growth and low financial leverage. The MSCI Quality Indices aim to provide exposure to the quality factor, which factor is complementary to other systematic risk premia such as size, value, or low volatility and may provide diversification to a portfolio of risk premia strategies.
In April 2013, MSCI announced that BlackRock licensed the MSCI USA Momentum, MSCI USA Risk Weighted and MSCI USA Value Weighted Indices for a new series of iShares MSCI Factor ETFs. The MSCI USA Quality Index is the fourth in that series.
