A sound investment process and strong management team underpin iShares Edge MSCI Intl Value Factor ETF's Morningstar Medalist Rating of Gold. The portfolio maintains a sizable cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy's investment process inspires confidence and earns a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in liquidity exposure and an underweight in quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar 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

Shell PLC

Novan

Banco Santander

Rogers

TotalEnergies SE

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GlaxoSmithKline

BHP Billiton

Banco Bilbao Vizcaya Argentaria

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. iShares Edge MSCI Intl Value Factor ETF earns a High Process Pillar rating. 

The leading factor in the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Impressive risk-adjusted performance also bolsters the rating. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. The firm's five-year retention rate of 92% contributes to the process as well.

 This strategy tends to hold larger, more undervalued companies than its average peer in the Foreign Large Value Morningstar Category. Examining additional factor exposure, this fund has constantly tilted toward stocks with higher trading volumes than its Morningstar Category Peers over the past few years. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. Different from its historical appetite, however, the Liquidity factor was in line with the Morningstar Category average in recent months. This strategy has also favored low-quality stocks. This means the fund avoids holding companies that are consistently profitable, growing, and have solid balance sheets. Such positions do not tend to provide much ballast for a portfolio. In the most recent month, however, the fund's Quality exposure was in line with the Morningstar Category average. In addition, this strategy has exhibited a tilt toward higher-volatility stocks in these years, meaning companies that have a higher historical standard deviation of returns compared with peers. This orientation tends to pay off most prominently when markets are hot. In this month, the strategy also had more exposure to the Volatility factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in industrials by 2.9 percentage points in terms of assets compared with the category average, and its healthcare allocation is similar to the category. The sectors with low exposure compared to category peers are energy and financial services, with energy underweighting the average portfolio by 2.5 percentage points of assets and financial services similar to the average. The strategy owns 394 securities and is relatively concentrated. Specifically, 18.8% of the strategy's assets are housed within the top 10 holdings, compared with the category’s 13.9% average. And in closing, in terms of portfolio turnover, on a year-over-year basis, 14% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

High

Process

iShares Edge MSCI Intl Value Factor ETF's strong team drives the strategy's Above Average People Pillar rating. There are three managers listed on the fund: Paul Whitehead, Jennifer Hsui, Greg Savage. The team is well equipped, with an average of 18 years of portfolio management experience. Together, they manage a total of 257 strategies, with a Silver 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.

Above Average

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 MSCI International Value Factor ETF

IVLU tracks an index of large- and mid-cap developed ex-US equities, selected using fundamental metrics, and weighted by these metrics and market-cap.

At first glance, IVLU is a nice option for investors on the hunt for double-digit earnings yields. IVLU has had a solid performance recently, beating a few value ETFs I cover regarding one-month returns and outperforming IVV as well. Its robust Quant rating is telling. Nevertheless, FX factor is not to be ignored, especially its exposure to the yen as the currency is teetering around a record low as Japan's central bank remains pronouncedly dovish.

IVLU: Ex-U.S. Value Stocks Could Be A Buy If Not FX Risks

iShares MSCI Intl Value Factor ETF is an ex-US large cap value ETF, like EFV. This article compares them regarding a number of criteria. IVLU looks better, with a shortcoming: 36% of assets is in one single country.

IVLU Vs. EFV: Which Is The Better Ex-U.S. Large Cap Value ETF?

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News for iShares MSCI International Value Factor ETF ETF (IVLU)