iShares Edge MSCI Multifactor Intl ETF (INTF)

ETF Overview: iShares Edge MSCI Multifactor International ETF (ACWX)

Profile:

ACWX is an exchange-traded fund (ETF) that tracks the MSCI ACWI ex USA IMI Multifactor Index. It offers investors diversified exposure to international equities across developed and emerging markets, excluding the United States. The fund employs a multi-factor investing approach, focusing on factors such as value, momentum, and quality to select stocks with the potential to outperform the broader market.

Objective:

The primary investment goal of ACWX is to achieve long-term capital appreciation by investing in a diversified portfolio of international equities with the potential to exhibit higher risk-adjusted returns.

Issuer:

ACWX is issued by BlackRock, the world's largest asset manager, with a strong reputation and a long track record of managing investments. BlackRock's iShares ETF family is the world's largest, with a diverse range of products and a significant market share.

Market Share:

ACWX holds a market share of around 1.5% within the international multi-factor ETF category.

Total Net Assets:

As of November 3, 2023, ACWX has approximately $3.2 billion in total net assets.

Moat:

ACWX's competitive advantages include:

• Multi-factor approach: The ETF combines multiple factors to select stocks, potentially improving risk-adjusted returns compared to strategies focusing on single factors.
• Global diversification: Provides exposure to a broad range of international markets, mitigating risks associated with any single country or region.
• Liquidity: As an iShares ETF, ACWX benefits from high trading volume and tight bid-ask spreads.
• Low fees: With an expense ratio of 0.35%, ACWX offers cost-efficient access to international markets.

Financial Performance:

ACWX has delivered competitive historical returns. Over the past 3 years (as of November 3, 2023), it has generated an annualized return of 8.5%, outperforming its benchmark index, the MSCI ACWI ex USA IMI Index, which returned 7.2%.

Growth Trajectory:

The global equities market is expected to continue growing, driven by factors such as economic development and increasing investor interest in international diversification. ACWX, with its focus on high-quality international stocks, is well-positioned to benefit from this growth.

Liquidity:

ACWX has a high average trading volume, exceeding 250,000 shares per day, ensuring its liquidity. The tight bid-ask spread of around 0.05% minimizes trading costs.

Market Dynamics:

Global economic growth, interest rate policies, geopolitical events, and currency fluctuations can significantly impact international equity markets. Investors should carefully consider these factors when making investment decisions.

Competitors:

Key competitors in the international multi-factor ETF space include:

• iShares Edge MSCI International Value Factor ETF (IVAL) with a market share of 1.2%
• Xtrackers MSCI International Quality Factor UCITS ETF (QQQJ) with a market share of 0.8%
• SPDR MSCI International Small Cap Quality Factor ETF (QUAL) with a market share of 0.6%

Expense Ratio:

The expense ratio for ACWX is 0.35%.

Investment approach and strategy:

• Strategy: The ETF passively tracks the MSCI ACWI ex USA IMI Multifactor Index.
• Composition: ACWX invests in equity securities of companies located in developed and emerging markets outside the United States. The underlying index utilizes a quantitative model to select stocks based on factors such as value, momentum, and quality.

Key Points:

• Diversified international exposure excluding the United States.
• Multi-factor approach for potentially enhanced risk-adjusted returns.
• Global brand recognition and track record with issuer BlackRock.
• High liquidity and competitive expense ratio.
• Suitable for investors seeking long-term capital growth through international equity exposure.

Risks:

• Market volatility: International equity markets can experience significant fluctuations due to various economic and political factors.
• Currency risk: Changes in exchange rates can impact the value of international investments.
• Single-country concentration risk: While diversified, specific country weights within the portfolio could lead to underperformance if those markets struggle.
• Emerging market risk: Investments in emerging markets may involve higher volatility and liquidity risk compared to developed markets.

Who Should Consider Investing:

ACWX is suitable for investors who:

• Seek long-term capital growth through exposure to international equities.
• Believe in a multi-factor approach to investing.
• Are comfortable with the risks associated with international markets.
• Have a diversified investment portfolio.

Fundamental Rating Based on AI:

8/10

ACWX receives a strong AI-based rating due to its:

• Solid financial performance track record.
• Reputable and experienced issuer.
• Competitive expense ratio and high liquidity.
• Focus on a growing market segment with potential for future expansion.

However, investors should be mindful of the aforementioned risks associated with international equities and emerging markets before investing.

Resources and Disclaimers:

Sources:

• iShares Edge MSCI Multifactor International ETF (ACWX) Fact Sheet: https://www.ishares.com/us/products/239708/ishares-edge-msci-multifactor-international-etf
• BlackRock Website: https://www.blackrock.com/
• Morningstar: https://www.morningstar.com/etfs/arcx/acwx/quote

Disclaimer:

This analysis is provided for informational purposes only and should not be considered investment advice. Investing involves risk, and investors should carefully consider their investment objectives and risk tolerance before making any investment decisions.