The iShares Edge MSCI International Quality Factor ETF (IQLT) seeks to track the investment results of the MSCI World ex USA Sector Neutral Quality Index. The fund aims to provide investors with exposure to large- and mid-cap stocks that exhibit positive fundamentals such as high return on equity, stable year-over-year earnings growth, and low financial leverage.
The MSCI World ex USA Sector Neutral Quality Index is designed to measure the performance of stocks in developed markets outside of the United States that have a higher quality profile based on three key fundamental factors: high return on equity, stable earnings growth, and low financial leverage. The index is constructed using a sector neutral approach, meaning that each sector is weighted based on its free float-adjusted market capitalization, rather than by a specific factor tilt.
The IQLT fund is designed to provide a broad exposure to international equity markets, with a focus on high-quality companies. The fund has a relatively low expense ratio compared to actively managed funds that focus on quality, making it a cost-effective way for investors to gain exposure to this investment style. The IQLT fund is also highly diversified, with exposure to hundreds of large- and mid-cap companies across a wide range of sectors and countries.
It is important to note that while the IQLT fund is designed to provide exposure to high-quality companies, it does not guarantee a positive return or protect against market downturns. As with any investment, investors should carefully consider their investment objectives, risk tolerance, and investment horizon before investing in the IQLT fund.
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