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BlackRock expands iShares factor ETF range with four European equity funds


BlackRock has expanded its range of iShares factor ETFs with the launch of four European focused factor funds. Each fund offers exposure to a distinct style of investing – Value, Momentum, Size and Quality. 

Factor ETFs offer an alternative approach to funds based on market capitalisation weighted indexes. They provide exposure to specific factors, or drivers, of risk and return and offer access to sources of potential return within an efficient, transparent index tracking vehicle.
The four new iShares factor funds offer precise exposure to value, smaller capitalisation companies, quality and price momentum as return drivers within European equities. The funds are physically replicating, purchasing the underlying equities of the index, and have an annual total expense ratio of 0.25%. The indexes upon which each ETF is built follow a transparent methodology developed with MSCI.
The iShares factor ETF suite allows investors to implement their views on the areas of the market they believe will outperform. They can be used to tilt portfolios and to diversify risk. Today’s launch complements iShares’ world factor ETFs and brings the total number of funds in the factor range to twelve.
The new funds are: the iShares MSCI Europe Value Factor UCITS ETF, which provide exposure to undervalued stocks relative to their sector; the iShares MSCI Europe Size Factor UCITS ETF, which provides exposure to smaller capitalisation companies within the MSCI Europe investment universe; the iShares MSCI Europe Momentum Factor UCITS ETF, which provide exposure to stocks that have been experiencing an upward price trend; and the iShares MSCI Europe Quality Factor UCITS ETF
Exposure to companies with strong balance sheets and stable earnings.
Tom Fekete, Head of iShares Product Development EMEA for BlackRock, says: “Investors are evolving their portfolio construction by expressing more distinct views on specific drivers of risk and return. Factor investing provides that facility, and factor ETFs offer the opportunity to access these exposures in a simple, cost efficient and transparent way.
“Smart beta and factor investing are major growth areas for the ETP industry, and have the potential to expand further in both the equity and fixed income markets.”
Deborah Yang, Managing Director, Head of the MSCI Index Business in EMEA and South Asia, says: “We are pleased that BlackRock has again turned to MSCI as its preferred provider for factor indexes. These innovative indexes have established a new and transparent basis to track factor returns through index-linked vehicles such as ETFs.”   

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