iShares smart beta ETFs launched on Xetra

Apr 20th, 2017 | By | Category: Equities

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Two new smart beta equity ETFs from iShares have been made available on Deutsche Börse’s Xetra and Frankfurt exchanges.

iShares smart beta ETFs launched on Xetra

The iShares Edge MSCI World Minimum Volatility UCITS ETF EUR Hedged and the iShares Edge MSCI World Multifactor UCITS ETF EUR Hedged are available to trade on Deutsche Börse.

The iShares Edge MSCI World Minimum Volatility UCITS ETF EUR Hedged tracks the MSCI World Minimum Volatility Index which seeks to reduce volatility compared to standard market-capitalisation-weighted indices.

The index reflects a managed-volatility equity strategy that employs a minimum-variance approach to achieve lower total risk, measured by standard deviation, than its parent index, the MSCI World Index, while maintaining close tracking and similar characteristics.

The fund follows an optimised replication methodology, which helps increase liquidity and reduce implementation, maintenance and replication costs. It may suit investors who are seeking a low cost, globally diversified equity portfolio but are particularly interested in minimizing the variability of the fund’s total returns.

The ETF has a total expense ratio (TER) of 0.35%

The iShares Edge MSCI World Multifactor UCITS ETF EUR Hedged tracks the MSCI World Diversified Multi-Factor Index which selects companies from the MSCI World based on four factors: company value (measured using price/earnings, price/book and enterprise value/operating cash flow), momentum (measured by share price performance), size (measured by market capitalisation) and quality (measured by return on equity, level of debt and earnings volatility). Constituent weights are optimized to maximize the exposure to the above factors.

The fund has a TER of 0.55%.

Both ETFs minimise the exchange rate risk between the US dollar and the euro by adopting a monthly currency hedge.

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