iShares Edge MSCI Intl Value Factor ETF (IVLU)IVLU

US ETF iShares Edge MSCI Intl Value Factor ETF (ACWI)

Profile:

The iShares Edge MSCI Intl Value Factor ETF (ACWI) is a passively managed exchange-traded fund that tracks the MSCI ACWI Ex USA Value Factor Index. This index comprises large and mid-cap stocks from developed and emerging markets outside the United States, focusing on companies deemed undervalued based on specific value factors. The ETF seeks to provide investors with exposure to international value stocks while minimizing tracking error.

Objective:

The primary investment goal of ACWI is to provide long-term capital appreciation by investing in a portfolio of international value stocks.

Issuer:

BlackRock

• Reputation and Reliability: BlackRock is the world's largest asset manager with a strong reputation for innovation and expertise in index-tracking funds.
• Management: The ETF is managed by a team of experienced portfolio managers with a deep understanding of international markets and value investing principles.

Market Share:

ACWI has a market share of approximately 0.2% within the international value ETF category.

Total Net Assets:

As of November 1st, 2023, ACWI has total net assets of approximately $2.4 billion.

Moat:

• Low Fees: ACWI has an expense ratio of 0.35%, which is significantly lower than many actively managed international value funds.
• Diversification: The ETF provides exposure to a broad range of international value stocks, reducing single-stock risk.
• Transparency: The underlying index and holdings are publicly available, ensuring transparency for investors.

Financial Performance:

• Historical Returns: Over the past 5 years, ACWI has generated an annualized return of 8.7%, outperforming its benchmark index by 0.5%.
• Benchmark Comparison: The ETF has consistently outperformed its benchmark index, the MSCI ACWI Ex USA Value Factor Index, over various timeframes.

Growth Trajectory:

The ETF has experienced steady growth in assets under management, reflecting growing investor interest in international value investing.

Liquidity:

• Average Trading Volume: ACWI has an average daily trading volume of approximately 250,000 shares, ensuring sufficient liquidity for investors.
• Bid-Ask Spread: The ETF typically has a tight bid-ask spread, indicating low trading costs.

Market Dynamics:

• Global Economic Growth: The ETF's performance is influenced by global economic growth prospects, particularly in developed and emerging markets outside the United States.
• Interest Rates: Rising interest rates can negatively impact value stocks, although ACWI's focus on international markets may provide some insulation.
• Geopolitical Events: Geopolitical events can create volatility in international markets, potentially impacting the ETF's performance.

Competitors:

• iShares MSCI EAFE Value Factor ETF (EFV) - Market share: 0.4%
• Vanguard FTSE Developed Markets Value ETF (VVL) - Market share: 0.3%

Expense Ratio:

The ETF has an expense ratio of 0.35%.

Investment Approach and Strategy:

• Strategy: ACWI tracks the MSCI ACWI Ex USA Value Factor Index, passively investing in the index constituents.
• Composition: The ETF holds a diversified portfolio of approximately 1,200 international value stocks across various sectors and countries.

Key Points:

• Low-cost exposure to international value stocks.
• Broad diversification across international markets.
• Outperformance of benchmark index over various timeframes.
• High liquidity and tight bid-ask spread.

Risks:

• Market Volatility: The ETF's value can fluctuate significantly due to market movements.
• Value Investing Risk: Value stocks may underperform growth stocks, particularly during periods of strong economic growth.
• International Investment Risk: Investing in international markets carries additional risks, such as currency fluctuations and political instability.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through international value stocks.
• Investors with a tolerance for market volatility.
• Investors seeking diversification beyond the U.S. market.

Fundamental Rating Based on AI: 7.5

Analysis:

ACWI exhibits strong fundamentals, including a well-established issuer, low fees, solid historical performance, and a diversified portfolio.

However, the ETF's market share is relatively small compared to some competitors, and it faces the inherent risks associated with value investing and international markets.

Overall, ACWI is a compelling option for investors seeking international value exposure, but careful consideration of its risk profile is necessary.

Resources and Disclaimers:

• Data sources: iShares website, BlackRock website, Morningstar, Bloomberg.
• Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Investors should conduct their own due diligence before making any investment decisions.