iShares targets risk management with four minimum volatility ETFs

By Toni Weeks

San Diego, Oct. 20 - iShares, Inc. has launched four new minimum volatility funds designed to help investors manage risk in their portfolios, according to a press release by parent company BlackRock, Inc. The new funds will trade on the NYSE Arca.

The funds can help provide a portfolio with downside protection while seeking to maintain some exposure to the upside price movement. They include the iShares MSCI Emerging Markets Minimum Volatility index fund, the iShares MSCI EAFE Minimum Volatility index fund, the iShares MSCI USA Minimum Volatility index fund and the iShares All Country World Minimum Volatility index fund.

"In today's market environment, there is increased interest in managing risk and finding a solution via ETFs," Darek Wojnar, head of iShares product development at BlackRock, commented in the release. "Investors are seeking 'smart beta' solutions," he said.

"The new iShares Minimum Volatility funds can help investors to reduce overall risk in a portfolio while retaining equity exposures. These funds can provide a complement to the core passive portfolio, helping to optimize risk-adjusted returns over the long term."

The funds track the MSCI Minimum Volatility indexes, which are constructed by optimizing the respective parent MSCI indexes, by determining weights for securities in the indexes with the lowest total risk. Index constraints such as country, sector and style exposures are applied to the optimization to ensure diversification while broadly matching the profile of the corresponding capitalization-weighted MSCI index.

iShares exchange-traded funds are managed by New York-based BlackRock.

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