iShares ETF targets small-caps

BlackRock has launched a global equity small-cap ETF, saying investors could use it to tap into global economic growth with less risk from changes to global trading arrangements.

The iShares MSCI World Small Cap Ucits ETF invests in smaller companies in developed markets and its greatest exposures are towards stocks of real estate, industrial and materials businesses.

The developed small-cap segment forms about 12% of the $70 trillion (€56.79 trillion) global equities market and the index provides access to over 4,000 small-sized companies from 23 developed markets.

David Moroney, BlackRock’s Europe, Middle East and Africa head of iShares product, said investors were using small-cap ETFs to diversify their global equity allocations.

“Acceleration in economic growth will benefit small cap stocks, as these companies tend to add to employment quicker and contribute to growth faster,” he added.

He also said that the domestic focus of smaller companies meant they normally benefitted from domestic growth policies and were less impacted by changes in global trade arrangements.

The ETF has a total expense ratio of 0.35%.

©2018 funds europe

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