BlackRock has launched a new ETF in Europe providing exposure to emerging market stocks with strong value characteristics.

BlackRock’s latest factor ETF provides exposure to EM value.

The iShares Edge MSCI EM Value Factor UCITS ETF has been listed on the London Stock Exchange, in US dollars (EMVL LN), and on Xetra, in euros (5MVL GY).

It is linked to the MSCI Emerging Markets Select Value Factor Focus Index.

The index screens the parent MSCI Emerging Markets Index universe for stocks with favourable value traits based on three criteria – price to expected earnings, price to book value, and enterprise value to operating earnings (cash flow) – to deliver higher exposure to the value style factor.

Currently, the index has 162 constituents (as of 30 Nov) compared to more than 1000 for the parent index.

Securities are weighted using an optimization model that seeks to maximize exposure to the value factor while avoiding extreme deviations (at the stock, sector, and country level) relative to the parent index. The index is reviewed semi-annually.

China is by far the largest country exposure with a weight of 37.6%, followed by South Korea (18.1%), Russia (10.7%), Taiwan (9.2%), and Brazil (8.7%). Information technology and financials lead the sector exposures with weights of 21.9% and 20.5% respectively, followed by energy (10.5%), materials (8.7%), and industrials (7.6%).

The fund comes with a total expense ratio (TER) of 0.40%. Income is accumulated within the portfolio.

The launch complements BlackRock’s existing suite of value-focused ETFs tracking MSCI indices, which include funds targeting global developed (based on the MSCI World stock universe), US (MSCI USA), and European (MSCI Europe) equities.

The ETFs range in price from 0.20% and 0.30% and collectively house more than $3 billion in assets under management.