iShares Edge MSCI World Momentum Factor UCITS ETF USD (Acc)

Issuer: iShares

Asset Class: Equity

TER: 30bps

Trading Currency: GBX

Pays Income: False

Listing Date: 06 Oct 2014

Ticker: IWFM

ISIN: IE00BP3QZ825

This fund offers targeted exposure to large and mid-capitalisation stocks from developed global markets that exhibit high price momentum. This investment approach is rooted in the “momentum factor,” a well-documented market anomaly suggesting that assets which have performed strongly in the recent past tend to continue this outperformance in the near term. The strategy aims to capture this by systematically selecting securities based on their risk-adjusted price performance over the last 6 and 12 months, effectively seeking to capitalize on existing market trends.

The underlying portfolio is constructed by tracking a specific momentum-focused index, which rebalances on a semi-annual basis to ensure it consistently holds companies with the strongest momentum characteristics. This rules-based methodology removes emotional bias from the investment process. By investing in this product, individuals gain diversified access to a momentum-tilted portfolio, spreading risk across various sectors and countries within the developed world. This can serve as a tactical tilt to a core portfolio, with the aim of enhancing returns, particularly in trending market environments.

While the momentum strategy has historically offered the potential for excess returns, investors should be aware of its cyclical nature. This factor can experience periods of significant underperformance, especially during sharp market reversals or when market leadership rotates abruptly from “growth” to “value” stocks. Therefore, this strategy is best suited for investors with a longer-term horizon who understand the risks associated with factor investing and are looking to add a dynamic, trend-following component to their diversified investment strategy.