The IQ 500 International ETF (NYSEARCA: IQIN) seeks investment results that track, before fees and expenses, the price and yield of the IQ 500 International Index.
The IQ 500 International Index evaluates stocks with a “high-IQ” strategy using three fundamental factors: sales, market share and operation margin. The top 500 international securities, based on their composite rank, are then included in the Index.
IQIN offers a straightforward alternative to cap-weighted exposure to developed market ex-U.S. stocks. To earn a berth among the top 500 international stocks, sales are compared across all firms regardless of sector, while market share and operation margin are sector-related measures.
The index creates a score for every international stock, treating each factor equally, then uses the score to select and weight the portfolio. The top 500 are selected from a Labor Market Information (LMID) universe. Stock price and market cap are ignored in the calculations, therefore ideally removing the momentum bias of cap-weighted indexes.
Still, larger firms should figure prominently, given their heftier sales and market shares. IQIN’s index predates the ETF’s launch by more than 10 years, offering an extended record for comparison, albeit one without portfolio rebalancing expenses.
With an average weighted market cap of almost $50 billion, the fund has a whopping 495 holdings. It is heavily weighted in Japan (27.48%), with Germany (14.09%) second and France (13.68%) third. Its top three sectors are Industrials (21.67%), Consumer Cyclicals (18.58%) and Basic Materials (11.21%).
IQIN has amassed $233 million in assets under management, and it has a 0.2% spread. Its share price currently trades just under $30, as you can see in the chart above, and has a 2.27% distribution yield, which is always a nice added bonus.
The fund has a 0.25% expense ratio, meaning it is relatively inexpensive to hold in comparison to other exchange-traded funds. IQIN has had a relatively solid uptrend since its March lows due to the pandemic. However, please exercise your own due diligence in deciding whether it, or any other investment, fits your own individual portfolio goals.
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