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

Launched on 04/28/2015, the iShares MSCI Intl Multifactor ETF (INTF) is a smart beta exchange traded fund offering broad exposure to the Broad Developed World ETFs category of the market.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

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

However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.

Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.

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

Because the fund has amassed over $912.04 million, this makes it one of the larger ETFs in the Broad Developed World ETFs. INTF is managed by Blackrock. 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 1.86%.

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.

Looking at individual holdings, Rio Tinto Plc (RIO) accounts for about 3.04% of total assets, followed by Bhp Group Plc (BHP) and Roche Holding Par Ag (ROG).

INTF's top 10 holdings account for about 22.86% of its total assets under management.

Performance and Risk

The ETF has added roughly 10.22% and is up about 47.25% so far this year and in the past one year (as of 04/19/2021), respectively. INTF has traded between $20.66 and $30.20 during this last 52-week period.

The fund has a beta of 0.89 and standard deviation of 21.01% for the trailing three-year period, which makes INTF a medium risk choice in this particular space. With about 212 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 $44.89 billion in assets, Vanguard FTSE Developed Markets ETF has $97.63 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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