ETFs

Why We Upgraded This iShares ETF

Web Desk March 2, 2026

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Increased confidence in iShares MSCI USA Momentum Factor ETF’s MTUM steady exposure to stocks with momentum supported a Process Pillar upgrade to Above Average from Average, elevating its Morningstar Medalist Rating to Silver from Bronze.

This exchange-traded fund tracks the MSCI USA Momentum SR Variant Index, which ranks stocks by averaging their seven‑ and 13‑month returns, each adjusted for three‑year volatility to emphasize stable momentum and reduce exposure to cyclical names. It selects stocks with the highest risk-adjusted momentum scores up to a fixed count, applies buffers to limit turnover, and weights constituents by momentum and market cap with a 5% absolute weight cap. The index rebalances quarterly, rotating up to 30% of the portfolio or until all holdings show stronger momentum than remaining candidates. During periods of extreme market volatility, it can conduct a special rebalance using only the seven‑month risk-adjusted momentum, allowing it to adapt faster to changing conditions.

BlackRock, iShares’ parent, has the technology and people to track this ETF’s index closely. It automates what it can and allows experienced managers to step in to handle index changes, rebalances, corporate actions, and trade approvals. The firm’s global trading desk provides cost‑efficient local execution, and an independent risk committee monitors tracking to keep results within set limits.

Key Morningstar Metrics for iShares MSCI USA Momentum Factor ETF

Morningstar Medalist Rating: Silver

Process Pillar: Above Average

People Pillar: Above Average

Parent Pillar: Above Average

A Solid US Stock Market-Tracking Passive ETF

More confidence in iShares Russell 3000 ETF’s IWV ability to capture the US equity market’s returns supported its Process Pillar rating upgrade to High from Above Average, lifting its overall Morningstar Medalist Rating to Silver from Bronze.

The fund seeks to replicate the Russell 3000 Index, which captures nearly the entire US equity market by weighting the largest 3,000 US stocks by market capitalization. This broad and stable construction keeps turnover exceptionally low, as changes to the index tend to be small. An eligibility screen helps ensure that included securities are liquid enough to trade efficiently. Rather than holding every constituent, the fund invests in a representative sample of them, which limits unnecessary transaction costs while matching the benchmark’s risk-and-return profile.

Key Morningstar Metrics for iShares Russell 3000 ETF

Morningstar Medalist Rating: Silver

Process Pillar: High

People Pillar: Above Average

Parent Pillar: Above Average

Better Portfolio Builders

AQR Long-Short Equity Fund Class R6’s QLERX improved portfolio construction methods, which led to a Process Pillar rating upgrade to Above Average from Average and raised its Morningstar Medalist Rating to Bronze from Neutral.

The strategy pairs AQR’s market-neutral global stock‑selection model with a futures‑based beta overlay. The model ranks the 2,000 most liquid global equities using factors such as value, momentum, quality, and sentiment, while maintaining near‑zero beta to the MSCI World Index. A separate futures overlay then adds controlled equity exposure, targeting roughly 0.5 beta over time.

Since 2022, managers have gradually implemented a more systematic portfolio construction approach. The team used to allocate risk across four broad themes, but as research inputs grew, that approach required subjective decisions and grouped increasingly unrelated signals. The managers now allocate risk directly across about 300 related signal groups, using a statistical model that adjusts weights based on signal quality and real‑time evidence.