iShares Factor ETFs

Investing in specific factors may help investors reach their goals by helping to reduce portfolio volatility or improve returns. Factors are the persistent and well-documented asset characteristics that have historically driven investment risk and return.

Factors are not new — they have been present in portfolios for decades. But exchange traded funds (ETFs) helped to revolutionize how investors access these historically rewarded strategies by capturing the power of factors (sometimes called “smart beta”) in a transparent and cost-effective way.

  • 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:

    There’s 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, it’s as easy as booking a hotel.

Explore our Factor ETFs

Single Factor smart beta ETFs
Single Factor
Multifactor smart beta ETFs
Multifactor
Minimum volatility smart beta ETFs
Minimum Volatility
Fixed income smart beta ETFs
Fixed Income
Factor StrategyWhat does it do?Example Products
Single Factor Targets exposure to a factor that has been a long-term driver of returns, such as:
  • Value: Stocks discounted relative to fundamentals
  • Quality: Financially healthy companies
  • Momentum: Stocks with an upward price trend
  • Size: Smaller, more nimble companies
VLUE

QUAL

MTUM

SIZE
Multifactor Seeks to provide diversified exposure to a variety of factors LRGF

INTF

ACWF
Minimum Volatility Invests in a balanced portfolio of stocks that displays lower overall risk to the broad market USMV

EFAV

EEMV
Fixed Income Targets exposure to historically rewarded factors in fixed income securities to seek better risk-adjusted returns FIBR 

IGEB

HYDB

What is factor rotation?

The BlackRock U.S. Equity Factor Rotation ETF (DYNF) is a dynamic and opportunistic ETF that emphasizes factors with the strongest near-term return prospects to seek outperformance versus the broad U.S. equity market.

  • At BlackRock, we believe every decision an investor makes is an active one. Whether you are tracking a market-cap portfolio or constructing a portfolio with a small-cap bias, every decision is an active decision, regardless of whether this is implemented through index or alpha-seeking strategies. Alpha, index, and factor exposures are merely tools that can be used to help achieve an outcome or express a view.

    In this sense, it is logical that the next trend to seek outperformance is through the dynamic use of factors.

    How do we do this? First, let’s start with a strategic allocation to rewarded style factors, including: value, quality, momentum, size and minimum volatility. Next, we dynamically allocate our exposure to these building blocks using our factor-based insights, considering criteria such as valuations, economic regime and relative strength.

    Introducing the BlackRock U.S. Equity Factor Rotation ETF. BlackRock’s first active ETF built to seek outperformance when compared to the US large and mid-cap equity market.

    Powered by Aladdin and fuelled by the research of Dr. Andrew Ang and the broader Factor-Based Strategies group, the BlackRock U.S. Equity Factor Rotation ETF, ticker DYNF, leverages the full capabilities of BlackRock’s investment platform.

    DYNF: A new way to access BlackRock's factor investing capabilities.

Analyze your investments through a factor lens:
Our Factor Box tool can help identify factor exposures in your mutual funds and ETFs, potentially shedding light on embedded drivers of risk and return.
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iShares Factor Box

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