The iShares International Equity Factor ETF (
INTF Quick Quote INTF - Free Report) made its debut on 04/28/2015, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World ETFs category of the market. What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $922.75 million, this makes it one of the average sized ETFs in the Broad Developed World ETFs. INTF is managed by Blackrock. This particular fund seeks to match the performance of the MSCI World ex USA Diversified Multi-Factor Index before fees and expenses.
The STOXX International Equity Factor Index composes of global developed market large and mid-capitalization stocks, excluding the US, that have favourable exposure to target style factors subject to constraints.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.15% for INTF, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.72%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Nestle Sa (NESN) accounts for about 1.95% of the fund's total assets, followed by Novo Nordisk Class B (NOVOB) and Novartis Ag .
Performance and Risk
The ETF has added roughly 3.33% so far this year and is down about -5.94% in the last one year (as of 03/27/2023). In the past 52-week period, it has traded between $20.83 and $28.22.
The fund has a beta of 0.87 and standard deviation of 19.31% for the trailing three-year period, which makes INTF a medium risk choice in this particular space. With about 513 holdings, it effectively diversifies company-specific risk.
IShares International Equity Factor ETF is not a suitable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Vanguard Total International Stock ETF (
VXUS Quick Quote VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF ( VEA Quick Quote VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $52.62 billion in assets, Vanguard FTSE Developed Markets ETF has $104.68 billion. VXUS has an expense ratio of 0.07% and VEA charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit
Zacks ETF Center.