A strong management team and sound investment process underpin iShares Currency Hdgd MSCI EAFE SmCp ETF's Morningstar Medalist Rating of Bronze. The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy merits an Above Average Process Pillar rating.  The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People, Process and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

iShares MSCI EAFE Small-Cap ETF

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. iShares Currency Hdgd MSCI EAFE SmCp ETF earns an Above Average Process Pillar rating. 
The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the investment results of the MSCI EAFE Small Cap 100% Hedged to USD Index composed of small capitalization developed market equities, excluding the U.S. and Canada, and while mitigating exposure to fluctuations between the value of the component currencies and the U.S. dollar.  The fund generally will invest at least 80% of its assets in the component securities (including indirect investments through the underlying fund) and other instruments of the index and in investments that have economic characteristics that are substantially identical to the component securities of the index. 

 The portfolio has allocations in its top two sectors, real estate and industrials, that are similar to the category. The sectors with low exposure compared to category peers are energy and technology; however, the allocations are similar to the category. The strategy owns 503 securities and is relatively top-heavy. Of the strategy's assets, all are concentrated within the top 10 holdings, compared to the typical peer's 12.8%. And in closing, in terms of portfolio turnover, on a year-over-year basis, 17% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position. 

 Note: The Process Pillar rating is indirectly assigned by an analyst. When an analyst covers a passively managed vehicle that tracks a particular index, Morningstar associates the Process Pillar rating assigned to that vehicle with the index concerned. Morningstar then maps the Process Pillar rating associated with a given index to any other uncovered passive strategies that track the same index. This ensures that the analyst’s view is leveraged whenever available and promotes consistency when assigning Process Pillar ratings to passive vehicles associated with a given index.

Above Average

Process

iShares Currency Hdgd MSCI EAFE SmCp ETF's strong team drives the strategy's Above Average People Pillar rating. There are four managers listed on the fund: Paul Whitehead, Jennifer Hsui, Greg Savage, Orlando Montalvo. The team is well equipped, with an average of 20 years of portfolio management experience. Together, they manage a total of 10 strategies, with a Bronze asset-weighted average Morningstar Medalist Rating, demonstrating their potential to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

iShares Currency Hedged MSCI EAFE Small-Cap ETF

HSCZ tracks an index of small-cap stocks from developed markets outside the US and Canada, hedged against movements in the underlying currencies for US investors.

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News for iShares Currency Hedged MSCI EAFE Small-Cap ETF ETF (HSCZ)