BlackRock Australia has announced three new exchange-traded funds (ETFs) among its product offerings to help investors access their preferred investment style in line with their broader objectives in a low-cost way.
The funds – iShares MSCI World ex Australia Momentum ETF (IMTM), iShares MSCI World ex Australia Value ETF (IVLU), and iShares MSCI World ex Australia Quality ETF (IQLT) – will be available on Cboe later this month and marks the inaugural iShares products listed on Cboe in Australia.
The iShares MSCI World ex Australia Momentum ETF (IMTM) tracks the MSCI World ex Australia Momentum Index that identifies large-and mid-cap developed global companies that have performed strongly over the last 6–12 months on a risk-adjusted basis. According to BlackRock, it is the first of its kind in the Australian market.
Meanwhile, the iShares MSCI World ex Australia Value ETF (IVLU) tracks the MSCI World ex Australia Enhanced Value Index that identifies undervalued large- and mid-cap developed global companies based on fundamentals.
Finally, the iShares MSCI World ex Australia Quality ETF (IQLT) tracks the MSCI World ex Australia Quality Sector Capped Select Index that identifies large- and mid-cap developed global companies that have healthy balance sheets, strong profit margins, and a track record of consistent year-on-year earnings growth.
According to BlackRock, IVLU and IQLT are priced 10 per cent and 30 per cent lower than their nearest competing ETF in the local market, respectively.
In terms of sector weightings, both ETFs apply sector caps and aim to target stocks across all sectors to minimise any unintended sector biases, and will be available in Australian hedged versions as well through the iShares MSCI World ex Australia Quality (AUD Hedged) ETF (IHQL) and iShares MSCI World ex Australia Value (AUD Hedged) ETF (IVHG) for investors who seek to reduce the volatility of foreign currency movements.
BlackRock Australasia’s head of wealth, Chantal Giles, said the expanded suite of momentum, quality, and value strategies will help advisers and investors to capitalise on market volatility and build more resilient portfolios.
“Style investing enables investors to adjust their portfolio allocations for different points in the market cycle and can play a complementary role by providing additional portfolio diversification,” she said.
Expanding on this, Tamara Stats, iShares ETF and index investments specialist, BlackRock Australasia, believed the broader selection of style “tilts” available would enable investors to be more dynamic with equities exposures and steer clear portfolio outcomes.
Ms Stats explained: “IMTM enables investors to ride positive momentum and can potentially outperform during periods of economic expansion. IQLT and IHQL aim to capture global stocks with capital growth potential even during periods of economic slowdown while IVLU and IVHG can offer portfolio resilience by giving investors targeted exposure to fundamentally sound, undervalued global stocks.
“These strategies will provide investors with additional building blocks for their portfolios, contributing to greater portfolio resilience.”
The new funds join the iShares Edge MSCI World Minimum Volatility ETF (WVOL), which will now see enhancements including a fee reduction from 30 bps to 25 bps, and a benchmark change to exclude Australia to bring it in line with the newly expanded suite.
