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A new way to invest:
iShares smart beta ETFs

Introducing factors and smart beta

Factors – well known, well documented, well understood investment characteristics – are present in all portfolios. Factors are not new.

What is new is the way we access these investment ideas, such as through smart beta exchange traded funds (ETFs). Smart beta ETFs capture the power of factors, delivering them in a cost and tax efficient structure, revolutionizing the way investors access these historically rewarded investment ideas.

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    In our pockets, we now hold the ability to summon a car, monitor our health, and make a restaurant reservation. Advances in data and technology are driving innovation, bringing scale to reduce cost, and transforming our lives.

    But, how is this relevant to our investments?

    We’ve learned from painful experiences that traditional ways of investing might not have truly protected us. And it’s hard to select investments.

    We need a new way. Factor investing can help.

    Powered by data and technology, coupled with fundamental investment ideas, that new way of investing may be here. But what are factors?

    As long as there have been markets, investors have bought cheap, trending, high quality, small, and lower risk stocks. These simple strategies are what we now call factor investing.

    Factors are to securities what nutrients are to food. For example, just as milk contains fats and protein that contribute to its nutritional value, a stock might have value and momentum attributes that drive its returns.

    And just as people have different nutritional needs, investors may need different factor exposures. Nutrients power you; factors power your portfolio.

    Factors aren’t new. They have been around for decades and are grounded in rigorous, Nobel-prize winning research, but were primarily available through actively managed mutual funds.

    The innovation is not the investment ideas themselves. It’s in the way we access those investment ideas.

    Smart Beta Exchange Traded Funds capture the power of factors and deliver it in cost and tax efficient ETFs, revolutionizing the way investors access these rewarded investment ideas.

    Smart Beta is here to stay. Smart Beta. A new way.

Explore iShares smart beta ETFs

Smart Beta StrategyWhat does it do?Products
Single Factor Targets exposure to a factor that has been a long-term driver of returns, such as momentum, quality, size and value VLUE, QUAL, MTUM, SIZE
Multifactor Seeks to provide diversified exposure to a variety of factors that have been identified as drivers of long-term performance: momentum, quality, size and value LRGF, INTF, ACWF
Minimum Volatility Targets stocks that exhibit a lower level of volatility than their peers USMV, EFAV, EEMV
Fixed Income Targets exposure to historically rewarded factors in fixed income securities to help seek better risk-adjusted returns FIBR, IGEB, HYDB

 

How to use smart beta

There are many ways to implement smart beta. One way is as a complement to, or replacement for, traditional style box managers.

Click on a large cap style below to see how smart beta ETFs can deliver better returns at lower cost.

VALUE
BLEND
GROWTH
LARGE CAP
LARGE CAP
MID CAP
MID CAP
SMALL CAP
SMALL CAP

VLUE has delivered better returns vs. actively managed value funds

Compare the growth of a hypothetical $10,000 investment in our VLUE ETF to an average of comparable actively managed value funds.

chart chart Past performance does not predict future returns.View standardized performance for iShares ETFs.
VLUE
ACTIVELY MANAGED VALUE FUNDS
Average of comparable actively managed large cap value mutual funds*Expense ratio: 1.02%

QUAL has delivered better returns vs. actively managed blend funds

Compare the growth of a hypothetical $10,000 investment in our QUAL ETF to an average of comparable actively managed blend funds.

chart chart Past performance does not predict future returns.View standardized performance for iShares ETFs.
QUAL
ACTIVELY MANAGED BLEND FUNDS
Average of comparable actively managed large cap blend mutual funds*Expense ratio: 1.07%

MTUM has delivered better returns vs. actively managed growth funds

Compare the growth of a hypothetical $10,000 investment in our MTUM ETF to an average of comparable actively managed growth funds.

chart chart Past performance does not predict future returns.View standardized performance for iShares ETFs.
MTUM
ACTIVELY MANAGED GROWTH FUNDS
Average of comparable actively managed large cap growth mutual funds*Expense ratio: 1.12%
The Factor Box: A new lens
Understanding risk and drivers of performance can be difficult. The Factor Box provides a new lens, illuminating factor exposure in investments.
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