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?
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $862.99 million, this makes it one of the larger ETFs in the Broad Developed World ETFs. INTF is managed by Blackrock (NYSE:BLK). 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.
The fund has a 12-month trailing dividend yield of 3.09%.
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.
Taking into account individual holdings, Roche Holding (OTC:RHHBY) Par Ag (ROG) accounts for about 3.30% of the fund's total assets, followed by Rio Tinto Plc (NYSE: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
The ETF has lost about -5.73% and is down about -2.71% so far this year and in the past one year (as of 11/09/2020), respectively. INTF has traded between $17.43 and $27.44 during this last 52-week period.
The ETF has a beta of 0.88 and standard deviation of 21.11% 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.
Alternatives
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 $27.62 billion in assets, Vanguard FTSE Developed Markets ETF has $77.55 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.
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 MSCI Intl Multifactor ETF (INTF): ETF Research Reports
BHP Group Limited (NYSE:BHP): Free Stock Analysis Report
Rio Tinto PLC (RIO): Free Stock Analysis Report
Rogers Corporation (NYSE: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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