iShares MSCI International Value Factor ETF (0BYC)
XBER 
Summary
0BYC Chart
IVLU: A Solid International Large-Cap Value ETF With 2 Tough Competitors
IVLU provides diversified exposure to international large-cap value stocks in developed markets. The ETF currently has high exposure to stocks in Japan (31%) and has $4.3B in assets under management. IVLU selects stocks based on their trailing P/B, forward P/E, and trailing EV/CFO ratios. Its 12.54x trailing P/E is also quite cheap compared to peers, though not necessarily against itself. This article identifies FNDF and PXF as two potentially better choices. Specifically, I found them to be of higher quality than IVLU, which could explain their superior long-term returns.
IVLU: The Value Factor Is Alive And Kicking In International Markets
iShares MSCI Intl Value Factor ETF offers value exposure with a portfolio of 351 international stocks, notably overweighting Japan and financials. IVLU has outperformed its benchmark IDEV by 1.4% annualized since inception and by 18 percentage points over the past year, highlighting recent value factor strength. The fund boasts a 152% 9-year dividend growth, but distributions have been volatile, with significant cuts in 2018 and 2020.
IVLU: Financials Probably Have A Little More To Run
Financials have performed very well already, particularly in Europe, but remain quite reasonably priced with NIMs rather resilient to rate cuts. In Japan, they are benefiting from greater investment and capital market activity. iShares Edge MSCI Intl Value Factor ETF has been a great way to avoid the major hit to portfolios from the significantly lower USD on a YTD basis.
iShares MSCI International Value Factor ETF (0BYC) FAQ
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iShares MSCI International Value Factor ETF Profile
| XBER Exchange | US Country |
Overview
The described company operates as a fund that primarily invests in a diverse range of securities which are part of the MSCI World ex USA Index, focusing on providing investors with exposure to international markets excluding the United States. By adhering to a strategy that involves investing at least 80% of its assets in the securities forming part of the underlying index, the company aims to replicate the economic characteristics of these securities. The index itself is constructed based on a traditional market capitalization-weighted approach, facilitating an investment avenue that mirrors the performance of non-U.S. equities across various industries and countries. Additionally, the fund's strategy allows for the inclusion of derivatives and cash equivalents to manage risk and optimize returns, showcasing a flexible investment approach within the predetermined framework of the underlying index.
Products and Services
The fund offers a comprehensive suite of investment solutions designed to meet the diverse needs of its clients, encompassing both direct investments in securities and the utilization of derivatives and other financial instruments to achieve its investment objectives. Detailed below are the primary components of its product and service offerings:
- Component Securities Investments:
Direct investments in the stocks and securities that constitute the MSCI World ex USA Index. This aspect of the service ensures that the bulk of the fund's assets are allocated towards equities that reflect the economic performance of countries outside the United States, aiming to deliver returns that are closely aligned with the market trends and dynamics of the constituent securities.
- Economic Characteristics Mimicking:
In addition to direct investments, the fund seeks out investments that have economic characteristics substantially identical to the component securities of the underlying index. This strategy is geared towards maximizing the fund's alignment with the index's performance through strategic investments that mirror the economic impact and potential returns of the direct securities within the index, thereby broadening the scope of investment opportunities.
- Derivatives and Financial Instruments:
Allocation of up to 20% of its assets in futures, options, and swap contracts. These financial instruments are employed to enhance the fund’s investment strategy, offering means to hedge against potential market fluctuations, speculate on future trends, or gain controlled exposure to particular sectors or security types without the need for direct investment. This facilitates an additional layer of risk management and return optimization within the fund’s investment portfolio.
- Cash and Cash Equivalents:
Investment in cash and cash equivalents as part of the asset allocation strategy. These low-risk assets offer liquidity and security for the fund’s assets, ensuring that it retains the flexibility to promptly respond to changing market conditions, take advantage of new investment opportunities, or manage asset allocation efficiently to meet its investment goals while mitigating risk.
- Non-Index Securities Investments:
Opportunistic investments in securities not included in the underlying index. Up to 20% of the fund's assets may be dedicated to such investments, allowing for the exploration of additional avenues for potential growth and diversification beyond the confines of the MSCI World ex USA Index. This component of the service provides the fund with the capability to capitalize on unique investment opportunities that may arise outside the scope of the index, without diverging significantly from its overall investment strategy.
