BlackRock has launched two new ETFs in Europe providing exposure to US large-cap stocks that are either growth- or value-oriented.
BlackRock’s US-listed growth and value ETFs are go-to products for style-based US equity investing.
The iShares Russell 1000 Growth UCITS ETF (R1GR) and iShares Russell 1000 Value UCITS ETF (R1VL) have been listed on London Stock Exchange and Euronext Amsterdam in US dollars.
Each ETF comes with an expense ratio of 0.18%.
The funds replicate the strategies of two of BlackRock’s US-listed ETFs – the $71 billion iShares Russell 1000 Growth ETF (IWF US) and $52bn iShares Russell 1000 Value ETF (IWD US) – which are go-to products for style-based US equity investing.
Methodology
R1GR and R1VL are linked to the Russell 1000 Growth UCITS 30/18 Capped Net Tax 15% Index and Russell 1000 Value UCITS 30/18 Capped Net Tax 15% Index, respectively.
Each index is constructed from the large and mid-cap Russell 1000 Index universe which consists of approximately the largest 1,000 companies listed and domiciled in the US.
To create its style indices, index provider FTSE Russell employs a multi-variable approach, using book-to-price, I/B/E/S forecast medium-term growth, and historical sales per share growth to determine whether a company is part of the growth or value investment universe.
Stocks that are determined to be ‘fully growth’ or ‘fully value’ are assigned directly to their appropriate index. Meanwhile, stocks that possess combinations of both growth and value characteristics may be allocated to both indices.
Each index weights its constituents by market capitalization, while those stocks with both growth and value characteristics are proportionally represented in both indices based on their style tilt – for example, a growth-leaning stock that is represented at 80% of its market cap weight in the Russell 1000 Growth Index will be represented at 20% of its market cap weight in the Russell 1000 Value Index.
Each index is fully reconstituted annually to ensure it remains representative of stocks with growth or value characteristics.