SET YOUR SIGHTS ON TIME-TESTED STRATEGIES
Factor ETFs

SET YOUR SIGHTS ON TIME-TESTED STRATEGIES

Active managers have targeted factors to drive returns for decades, who says you can’t do the same with an ETF?

WHAT ARE FACTORS?

Factors are broad, persistent drivers of return across asset classes. These intuitive investment screens, such as buying cheap companies or targeting companies with strong and healthy balance sheets, have been around for generations.

FACTOR INVESTING: AS EASY AS BOOKING A HOTEL

In the same way that we can instantly screen hotels for price or location, iShares Factor ETFs use data and technology to access the same drivers of return that active managers have used for decades, but at a fraction of the cost.

  • Remember how hard it used to be to book a vacation? We used to spend hours on the phone with a travel agent, then wait days, even weeks for them to work their magic. And that magic came with a high fee because only travel agents had access to the important information needed to book our vacation.

    But the information that was once only available to travel agents is now available to anyone  within seconds. Travel sites have made finding the perfect hotel cheaper, faster and more efficient.

    The same is true for investing. For years, active managers used teams of analysts to find stocks that seemed more likely to outperform. And as an investor, you had to pay a lot in fees to access that thinking.

    Many of the traits that active managers have looked for (like buying underpriced, quality stocks) are called Factors. And just like you no longer need to call a travel agent to book an affordable, quality vacation, you no longer need to pay large fees for active managers to choose the right stocks based on Factors.

    Now, you can use iShares Factor ETFs to invest in stocks that exhibit the Factors that have historically driven portfolio returns.

    Just as travel sites use simple filters to quickly drill down to the perfect hotel, factor investing provides access to security screens that active managers have used for generations. Thanks to data and technology, the investment ideas that once took a team of analysts months to research now takes a fraction of the time, at a fraction of the cost.

    There are five Factors that have historically proven to be drivers of return, and iShares offers ETFs that seek to capture all five:

    Theres Quality, which identifies companies with strong and healthy balance sheets. Minimum Volatility, or stocks that are less volatile than the broad market. Size, which targets smaller, more nimble companies. Momentum, which seeks stocks on an upswing. And value, which targets stocks that are inexpensive relative to their fundamentals.

    Factor ETFs deliver the power of time-tested investment screens in a low-cost and tax-efficient investment vehicle, revolutionizing access for everyday investors.

    Who said finding the right securities for your portfolio was difficult? We say, its as easy as booking a hotel.

EXPLORE FACTORS

Factors - well known, well documented, well understood investment characteristics – are present in all portfolios. Explore the 5 factors that have historically driven portfolio returns.
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Minimum Volatility

Objective
Objective
Invests in stocks that have collectively exhibited lower volatility
Screens
Screens
Volatility of each stock in the broad market index and correlations between stocks, sectors, and countries

Quality

Objective
Objective
Invests in companies with healthy balance sheets
Screens
Screens
Return on equity (ROE), earnings consistency, and debt-to-equity (D/E) ratio

Value

Objective
Objective
Invests in stocks that are inexpensive relative to fundamentals
Screens
Screens
Price-to-earnings (P/E) ratio, enterprise value to cash flow, and price-to-book (P/B) ratio

Momentum

Objective
Objective
Invests in stocks on an upswing
Screens
Screens
Risk-adjusted price momentum

Size

Objective
Objective
Invests in smaller, more nimble companies
Screens
Screens
Market capitalization

USING FACTOR ETFs IN YOUR PORTFOLIOS

iShares Factor ETFs can help you seek differentiated portfolio outcomes, such as enhanced returns, or reduced risk.

The “new style box” provides guidance on where these factors can fit within your portfolios.
SEEK OUTPERFORMANCE
Don’t pay active fees for factor-based returns. Modernize your approach to the traditional style box and use factor ETFs to pursue outperformance.
Seek outperformance
SEEK REDUCED RISK
Don’t let market volatility get in the way. Minimum volatility strategies can help you manage risk and keep your clients invested.
SEEK REDUCED RISK

GET STARTED WITH FACTORS

Consider these iShares Factor ETFs to help drive outcomes for your clients.
iShares Edge MSCI Min Vol USA ETF
iShares Edge MSCI Min Vol USA ETF
Exposure to U.S. stocks with potentially less risk
iShares Edge MSCI USA Quality Factor ETF
iShares Edge MSCI USA Quality Factor ETF
Exposure to large- and mid-cap U.S. stocks exhibiting positive fundamentals
iShares Edge MSCI USA Value Factor ETF
iShares Edge MSCI USA Value Factor ETF
Exposure to large- and mid-cap U.S. stocks with lower valuations based on fundamentals
iShares Edge MSCI USA Momentum Factor ETF
iShares Edge MSCI USA Momentum Factor ETF
Exposure to large- and mid-cap U.S. stocks exhibiting relatively higher price momentum

LEARN MORE ABOUT FACTOR INVESTING

HOW FACTOR INVESTING WORKS
Learn how to use Factor ETFs in your portfolios to build resilience and simple ways to explain them to your clients.
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HOW FACTOR INVESTING WORKS