Invesco has expanded its US line-up of dynamic multi-factor equity ETFs with the launch of a strategy targeting developed market stocks outside of the US. Anna Paglia, Global Head of ETFs and Indexed Strategies at Invesco. The Invesco International Developed Dynamic Multifactor ETF (IMFL US) has listed on Cboe BZX Exchange and comes with an expense ratio of 0.34%.
Source: Invesco launches international dynamic multi-factor rotation-strategy ETF
The fund tracks the FTSE Developed ex-US Invesco Dynamic Multifactor Index which is based on the parent FTSE Developed ex US Index universe of large and mid-capitalization stocks from 24 developed market countries excluding the US.
The index dynamically allocates to single factor sub-indices depending on the stage of the business cycle and overall market sentiment.
Targeted factors include low volatility, momentum, quality, size, and value with each sub-index maintaining broad market exposure while tilting to stocks with the greatest exposure to the selected factor.
The combination of factor sub-indices is determined monthly using Invesco’s proprietary Regime Model which analyzes metrics such as manufacturing and consumer sentiment, monetary conditions, housing and construction activity, and labour market conditions to determine whether the business cycle is in recovery, expansion, slowdown, or contraction.
During the recovery phase, the index will allocate equally to size and value sub-indices; during the expansion phase, the index will allocate half its weight to momentum and a quarter each to size and value; during the slowdown phase, the index will allocate equally to low volatility and quality; and during the contraction phase, the index will equally allocate to low volatility, momentum, and quality.
Invesco offers a further two dynamic multi-factor ETFs targeting the large and small-cap segments of the US equity market. The Invesco Russell 1000 Dynamic Multifactor ETF (OMFL US) houses $1.4 billion in assets and comes with an expense ratio of 0.29%, while the Invesco Russell 2000 Dynamic Multifactor ETF (OMFS US) contains $70 million and costs 0.39%.
Anna Paglia, Global Head of ETFs and Indexed Strategies at Invesco, commented: “Invesco has a strong track record of offering dynamic multi-factor ETFs that adapt and evolve factor holdings as the market environment changes. Clients will now have access to international equities across geographies through an easily accessible ETF.”