The iShares MSCI Intl Multifactor ETF (INTF) made its debut on 04/28/2015, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
INTF is managed by Blackrock, and this fund has amassed over $907.92 million, which makes it one of the larger ETFs in the Broad Developed World ETFs. INTF, before fees and expenses, seeks to match the performance of the MSCI World ex USA Diversified Multi-Factor Index.
The MSCI World ex USA Diversified Multi-Factor Index is designed to select equity securities from MSCI World ex USA Index that have high exposure to four investment style factors: value, quality, momentum and low size, while maintaining a level of risk similar to that of the Parent Index.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF’s expense ratio.
Operating expenses on an annual basis are 0.30% for INTF, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.94%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it’s still important for investors to research a fund’s holdings.
Taking into account individual holdings, Roche Holding Par Ag (ROG) accounts for about 3.30% of the fund’s total assets, followed by Rio Tinto Plc (RIO) and Bhp Group Plc (BHP).
Its top 10 holdings account for approximately 22.37% of INTF’s total assets under management.
Performance and Risk
So far this year, INTF has lost about -0.89%, and was up about 1.94% in the last one year (as of 12/02/2020). During this past 52-week period, the fund has traded between $17.43 and $27.44.
The ETF has a beta of 0.90 and standard deviation of 21.23% for the trailing three-year period, making it a medium risk choice in the space. With about 207 holdings, it effectively diversifies company-specific risk.
IShares MSCI Intl Multifactor ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Total International Stock ETF (VXUS) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $32.51 billion in assets, Vanguard FTSE Developed Markets ETF has $84.86 billion. VXUS has an expense ratio of 0.08% and VEA charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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iShares MSCI Intl Multifactor ETF (INTF): ETF Research Reports
BHP Group Limited (BHP) : Free Stock Analysis Report
Rio Tinto PLC (RIO) : Free Stock Analysis Report
Rogers Corporation (ROG) : Free Stock Analysis Report
Vanguard FTSE Developed Markets ETF (VEA): ETF Research Reports
Vanguard Total International Stock ETF (VXUS): ETF Research Reports
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