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Is iShares Edge MSCI Multifactor Intl ETF (INTF) a Strong ETF Right Now?

The iShares Edge MSCI Multifactor Intl ETF (INTF) was launched on 04/28/2015, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Developed World ETFs category of the market.

What Are Smart Beta ETFs?

For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

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.

The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.

Fund Sponsor & Index

The fund is managed by Blackrock, and has been able to amass over $933.07 million, which makes it one of the larger ETFs in the Broad Developed World ETFs. INTF seeks to match the performance of the MSCI World ex USA Diversified Multi-Factor Index before fees and expenses.

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

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.

With on par with most peer products in the space, this ETF has annual operating expenses of 0.30%.

INTF's 12-month trailing dividend yield is 3.17%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

When you look at individual holdings, Roche Holding Par Ag (ROG) accounts for about 3.49% of the fund's total assets, followed by Rio Tinto Plc (RIO) and Koninklijke Philips Nv (PHIA).

INTF's top 10 holdings account for about 23.53% of its total assets under management.

Performance and Risk

So far this year, INTF has lost about -8.21%, and is up about 1.97% in the last one year (as of 08/11/2020). During this past 52-week period, the fund has traded between $17.43 and $27.44.

The ETF has a beta of 0.91 and standard deviation of 20.60% for the trailing three-year period, making it a medium risk choice in the space. With about 205 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares Edge MSCI Multifactor Intl 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 FTSE AllWorld exUS ETF (VEU) tracks FTSE All-World ex US Index and the Vanguard FTSE Developed Markets ETF (VEA) tracks FTSE Developed All Cap ex US Index. Vanguard FTSE AllWorld exUS ETF has $24.82 billion in assets, Vanguard FTSE Developed Markets ETF has $74.16 billion. VEU 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.

Bottom Line

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 Edge MSCI Multifactor Intl ETF (INTF): ETF Research Reports
 
Rio Tinto PLC (RIO) : Free Stock Analysis Report
 
Rogers Corporation (ROG) : Free Stock Analysis Report
 
Vanguard FTSE AllWorld exUS ETF (VEU): ETF Research Reports
 
Vanguard FTSE Developed Markets ETF (VEA): ETF Research Reports
 
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