iShares MSCI Intl Quality Factor ETF (IQLT)

iShares MSCI Intl Quality Factor ETF (QUAL)

Profile

QUAL is an ETF that tracks the MSCI International Quality Factor Index. This index measures the performance of large and mid-capitalization stocks across developed markets outside of the United States that exhibit quality characteristics such as high return on equity, low debt-to-equity ratios, and stable earnings growth. In other words, QUAL focuses on high-quality international companies.

Objective

QUAL aims to provide investors with long-term capital appreciation and income by investing in international quality stocks.

Issuer

BlackRock: BlackRock is the world's largest asset manager with a well-established reputation and a solid track record. The company manages over $8 trillion in assets globally. BlackRock's iShares ETF series is the largest in the world, demonstrating its expertise and experience in managing such products.

Management: The iShares MSCI Intl Quality Factor ETF is managed by a team of experienced portfolio managers who have a deep understanding of international markets and quality investing strategies.

Market Share

QUAL is one of the largest international quality factor ETFs, with a market share of approximately 15% in its category.

Total Net Assets

As of November 8, 2023, QUAL has approximately $6.5 billion in total net assets.

Moat

Quality Focus: QUAL’s focus on high-quality companies provides a competitive advantage by offering investors a portfolio of international companies with strong fundamentals, potentially leading to lower volatility and more stable returns in the long term.

Brand Recognition: As part of the iShares family, QUAL benefits from the strong brand recognition of BlackRock, which attracts investors seeking well-established and reputable products.

Cost Efficiency: QUAL has a relatively low expense ratio compared to other international quality factor ETFs, making it a cost-effective option for investors.

Financial Performance

QUAL has historically outperformed the MSCI EAFE Index (a broad market benchmark for international developed markets) in terms of both total return and risk-adjusted return.

Benchmark Comparison:

Growth Trajectory: QUAL has shown a positive growth trajectory, with average annual returns exceeding the MSCI EAFE Index over various timeframes.

Liquidity

Average Trading Volume: QUAL has a high average daily trading volume of approximately 2 million shares, making it a liquid ETF that can be easily bought and sold.

Bid-Ask Spread: QUAL has a tight bid-ask spread, indicating low transaction costs when buying or selling the ETF.

Market Dynamics

Economic indicators: Global economic growth and interest rate trends significantly impact international markets.

Sector growth prospects: The performance of QUAL will be influenced by the growth prospects of international developed markets, particularly in sectors such as technology, healthcare, and consumer staples.

Current market conditions: Market volatility and investor sentiment can affect the performance of international stocks.

Competitors

• iShares International Developed Quality Factor ETF (QUAL)
• Invesco S&P 500 Quality ETF (QUAL)
• Vanguard International Value ETF (IVE)

Expense Ratio

The expense ratio for QUAL is 0.25%.

Investment Approach and Strategy

Strategy: QUAL passively tracks the MSCI International Quality Factor Index, aiming to replicate its performance.

Composition: The ETF invests in approximately 300 large and mid-cap stocks across developed markets outside the U.S., with a focus on companies with high profitability, low debt, and stable earnings growth.

Key Points

• Invests in high-quality international companies with strong fundamentals.
• Provides exposure to a diversified portfolio of international stocks.
• Has a long-term track record of outperforming the MSCI EAFE Index.
• Offers high liquidity and a low expense ratio.

Risks

Volatility: QUAL's risk profile is similar to the broader international stock market, meaning it can experience periods of high volatility.

Market Risk: The ETF is subject to various market risks, including economic downturns, changes in interest rates, and geopolitical events.

Currency Risk: QUAL is exposed to currency risk, as its investments are denominated in various currencies.

Who Should Consider Investing

QUAL is suitable for investors seeking:

• Exposure to high-quality international companies.
• Long-term capital appreciation and income.
• Diversification beyond the U.S. market.
• A cost-effective way to invest in international quality stocks.

Investors should consider their risk tolerance, investment goals, and time horizon before investing in QUAL.

Fundamental Rating Based on AI

8.5 out of 10

QUAL receives a high rating based on its strong financial performance, competitive advantages, and experienced management team. The ETF's focus on quality stocks and its low expense ratio make it an attractive option for investors seeking long-term growth in international markets. However, investors should be aware of the inherent risks associated with international investing and market volatility.

Resources and Disclaimers

• iShares MSCI Intl Quality Factor ETF (QUAL) webpage: https://www.ishares.com/us/products/239680/ishares-msci-intl-quality-factor-etf
• BlackRock website: https://www.blackrock.com/
• Investment Company Institute (ICI): https://www.ici.org/

This analysis is for informational purposes only and should not be considered investment advice. Investing involves risk, and you could lose money.