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BlackRock launches four US equity factor ETFs


BlackRock has launched four US equity-focused ETFs in its range of iShares factor ETFs, designed to enable investors to tilt their portfolios to the areas of the US equity market they believe will outperform. 

The iShares Edge MSCI USA Value Factor UCITS ETF offers exposure to undervalued stocks based on their fundamentals. BlackRock says that this offers an opportunity in anticipation that over the long run a portfolio focused on undervalued stocks will perform better than the wider market.
In expectation that over the long run a portfolio of smaller company stocks will get rewradded for the additional risk versus the broad market, the firm has launched the iShares Edge MSCI USA Size Factor UCITS ETF, offering exposure to smaller capitalisation companies within the MSCI USA investment universe.
The third new ETF offering is iShares Edge MSCI USA Momentum Factor UCITS ETF offering exposure to stocks that exhibit the strongest risk-adjusted performance over the last six and 12 months in the expectation that the price trend of these stocks will continue to outperform relative to the wider market.
Finally, the iShares Edge MSCI USA Quality Factor UCITS ETF offers access to companies with strong balance sheets and stable earnings, in anticipation that strong balance sheet companies will exhibit lower risk and perform better in the longer-term relative to the wider market.
BlackRock writes that the European factor and smart beta fund industry has now surpassed USD30 billion in assets. With the addition of these newly-launched ETFs, the iShares European-domiciled equity range contains 31 funds, across dividend strategies, minimum volatility, single and multi-factor exposures, with USD13.2 billion in assets under management.
Manuela Sperandeo, Head of iShares EMEA Specialist Sales at BlackRock, says: “Faced with growing political uncertainty, market volatility and low yields, investors tell us that they want a comprehensive set of tools with which to diversify risk in their portfolios.
“Different factors tend to perform in different market environments, and these four funds complement our European equity and global equity factor range allowing investors to express their views on the major global developed equity markets.”
The funds are physically-replicating, meaning they buy the securities of the index, and each has a total expense ratio of 0.20 per cent.

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