Tag Archives: basket

iShares is easily the biggest ETF sponsor globally, but other issuers are also holding their heads high now. Most sponsors are tapping lucrative areas as the market for plain vanilla ETFs looks to be maturing, compelling issuers to come up with novel themes. Most ETF launches are now based on the smart-beta theme. iShares has also started to regain its seemingly fading charm. The issuer has initiated quite a few ETFs with innovative ideas recently. As part of this effort, the mega issuer most recently launched five ETFs. Notably, in its all five launches, iShares provides exposure to stocks with high scores on attributes like value, quality, momentum, and low size. Let’s take a look inside the funds. iShares FactorSelect MSCI Global ETF (NYSEMKT: ACWF ) The newly launched passively managed ETF looks to track the performance of the MSCI ACWI Diversified Multi-Factor index. The fund currently holds 319 stocks from the 12 developed and emerging markets. The U.S. holds the highest weight with over 42% exposure followed by 12.8% occupied by Japan and 6.14% by China. All the other seven countries have less than 5.78% allocation each in the fund. Sector wise, Financials dominates the fund with 22% allocation, while Health Care (16.63%) and Industrials (16.43%) occupy the next two spots. The fund is low on utilities and energy, each carrying about 3% of the basket. The fund has very low company-specific concentration risk with no single stock occupying more than 2.35% of the total. The fund charges 50 basis points as fees. Competition: The newly launched product is likely to face competition from quite a number of funds prevalent in the global equities space. Still, a few specific ETFs can emerge as strong contenders. The SPDR MSCI World Quality Mix ETF (NYSEARCA: QWLD ), the AdvisorShares Accuvest Global Opportunities ETF (NYSEARCA: ACCU ) and the FlexShares International Quality Dividend Index ETF (NYSEARCA: IQDF ) are some of the examples. iShares FactorSelect MSCI International ETF (NYSEMKT: INTF ) The fund seeks to track the MSCI World ex-USA Diversified Multi-Factor Index to provide core international equity exposure. The fund holds a portfolio of 198 large and mid cap stocks from the developed markets outside North America. INTF focuses on an equal-weighted strategy with no stock forming more than 2.81% of the total fund assets. Japan is the top country holding of the fund with about 24% exposure followed by 18.5% in the U.K. and 10.31% in Switzerland. However, no other economy makes up over 6.82% of the basket. Sector wise, once again, Financials dominates the fund with 28.5% allocation, while Industrials (17.14%) and Consumer Discretionary (13.65%) occupy the next two spots. The fund is light on Telecom (3.9%) and Energy (2.0%) and charges 45 bps in fees. Competition: Like the global ETFs, this space is also heaving with products, with the Morningstar Developed Markets ex-US Markets Factor Tilt Index ETF (NYSEARCA: TLTD ), the JPMorgan Diversified Return International Equity ETF (NYSEARCA: JPIN ) and the First Trust Developed Markets Ex-US AlphaDEX ETF (NYSEARCA: FDT ) posing as tough competitors. iShares FactorSelect MSCI International Small-Cap ETF (NYSEMKT: ISCF ) This fund is also targeted at the international space with focus on the smaller spectrum of capitalization. Tracking the MSCI World ex-USA SmallCap Diversified Multi-Factor index, the fund holds a well-diversified portfolio of 659 stocks, with no stock taking more than 1.09% of the basket. Once again, Japan and the U.K. take top two positions in the fund with 29.4% and 23.7%, respectively. Sector wise, the fund is heavy on Consumer Discretionary (22.3%), Financials (19.2%) and Industrials (17.6%). The fund charges 60 bps in fees. Competition: The foreign mid and small cap equities ETF space is relatively less jam-packed compared to the other two segments discussed above. Among the set, while the Vanguard FTSE All-World ex-US Small-Cap Index ETF (NYSEARCA: VSS ) is one of the leaders based on AUM, the PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio ETF (NYSEARCA: PDN ) and the iShares Enhanced International Small-Cap ETF (NYSEARCA: IEIS ) can give ISCF a run for its money courtesy of their smart-beta and relatively active approach. U.S. ETFs Apart from global ETFs, the issuer also rolled out two U.S. ETFs, one with large-cap and the other with small-cap focus. The funds are the iShares FactorSelect MSCI USA ETF (NYSEMKT: LRGF ) and the iShares FactorSelect MSCI USA Small-Cap ETF (NYSEMKT: SMLF ). LRGF charges 35 bps in fees, while SMLF charges 50 bps. The large cap fund holds 133 stocks. No stock accounts for more than 2.87% of the basket. Health Care (21.39%) and Financials (20.87%) are the top two sectors of the fund. However, the small-cap fund is pretty spread out across 508 components with none accounting for more than 1.40% share. The fund is heavy on Financials (23.17%) and IT (21.71%). Notably, both spaces are crowded with products. Products like the First Trust Large Cap Core AlphaDEX ETF (NYSEARCA: FEX ) on the large-cap surface and the First Trust Small Cap Core AlphaDEX ETF (NYSEARCA: FYX ) on the small-cap space might emerge as competitors. Original Post